The price of bananas rose from $1.00 to $2.00 per pound. As per the law of demand, when price rose, the quantity demanded falls. However, the total revenue remains same. The total revenue does is not changing even though the price is changing.
As a result of rise in the price
The quantity of bananas will decrease.
The demand for bananas is
A. UNIT ELASTIC.
With the change in the price is not changing. Hence, the elasticity of demand will be unit elastic. The elasticity will be one. The percentage change in the price will be equal to the percentage change in the quantity demanded.
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