When the percentage change in quantity demanded equals the percentage change in its price. The demand for the this good is said to be?

1. Perfectly Elastic
2. Perfectlty Inelastic
3. Unitary Elastic
4. Less Elastic

Option 1 -> Perfectly Elastic demand occurs when elasticity is infinite, meaning even a tiny price change causes infinite quantity change.

Option 2 -> Perfectly Inelastic demand occurs when elasticity is zero, meaning quantity demanded remains constant regardless of price changes.

Option 3 -> Unitary Elastic demand occurs when elasticity equals 1, meaning percentage change in quantity demanded equals percentage change in price.

Option 4 -> Less Elastic (or Inelastic) demand occurs when elasticity is less than 1, meaning quantity demanded changes by a smaller percentage than price.

Hence, Option 3: Unitary Elastic -> When the percentage change in quantity demanded exactly equals the percentage change in price, the price elasticity of demand (PED) equals 1. This is the definition of unitary elastic demand. For example, if price increases by 10%, quantity demanded decreases by exactly 10%, making PED = 10%/10% = 1. In this case, total revenue remains constant when price changes -> correct