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What is the demand relationship in which the percentage change in quantity of a product demanded is the same as the percentage change in price in absolute value?

1) Perfectly elastic demand
2) Perfectly inelastic demand
3) Unitary elastic demand
4) Cross elastic demand

1 Answer

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Final answer:

The demand relationship where percentage changes in quantity demanded and price are equal in absolute value is called unitary elastic demand.

Step-by-step explanation:

The demand relationship in which the percentage change in quantity of a product demanded is the same as the percentage change in price in absolute value is known as unitary elastic demand. This means that if the price of a product increases by a certain percentage, the quantity demanded of that product will decrease by the same percentage, and vice versa.

For example, a 5% increase in price would result in a 5% decrease in quantity demanded. Price elasticity of demand is the concept that measures this responsiveness of the quantity demanded to a change in price.

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