Q:
What is an example of unitary elastic demand?
A:
Quick Answer
While there are no perfect examples of unitary elastic demand in real life, a close example is clothing. Decreases in price of the supply, whether from a sale or discount store, often creates an approximately equal increase in demand.
Continue ReadingFull Answer
The term unitary elastic demand, also known as unit elastic demand or unitarily elastic demand, means that for every percent increase or decrease in demand, there will be an equal corresponding increase or decrease in supply. The price elasticity of demand, which calculates the rate of change of the quantity over the rate of change of the supply of a good, is equal to one for a unitary elastic good.This can only occur with goods that have close substitutes or alternatives, like clothing brands.
Learn more about EconomicsSources:
Related Questions
-
Q:
What are some examples of ceteris paribus in economics?
A: One example of ceteris paribus in economics is when prices go up as demand exceeds supply, when all other factors are disqualified from the analysis, accor... Full Answer >Filed Under: -
Q:
What is a constant-cost industry?
A: According to Business Dictionary, a constant-cost industry is an industry in which the ratio of units produced to the production cost per unit is constant,... Full Answer >Filed Under: -
Q:
What affects natural gas prices?
A: The laws of supply and demand affect the price of natural gas. There are few available short-term alternatives to the product for purposes such as heating ... Full Answer >Filed Under: -
Q:
What happens when supply exceeds demands?
A: The law of supply and demand in economics indicates that a "surplus" exists when supply of a given product exceeds demand. If the supply of gum exceeds dem... Full Answer >Filed Under:
