What is UNITARY Demand? Best definition and TOP Example (Unitary Demand)

#demand #unitarydemand #priceelasticityofdemand
What is unitary demand?
Unitary elasticity of demand explained ⬇️
Unitary demand, also known as unitary elasticity of demand, occurs when the percentage change in quantity demanded is exactly equal to the percentage change in price.
In other words, when the price of a product changes by a certain percentage, the quantity demanded changes by the exact same percentage in the opposite direction.
Nota Bene: This results in a constant total revenue for the seller.
Example of #unitary #demand:
Imagine you own a bakery that sells loaves of bread. Currently, you sell your bread for $2 per loaf, and you sell 1,000 loaves per week. Now, let's say you decide to increase the price of your bread by 10% to $2.20 per loaf.
In a situation of unitary demand, the increase in price by 10% would lead to a decrease in quantity demanded by 10%. So, with the price increase, the quantity demanded would decrease from 1,000 loaves to 900 loaves.
Overall, if you look at the math carefully, the delta in revenue ($2000 vs $1980) is insignificant because now you're selling less but for more. Ergo, it might turn out to be more profitable and who does not want that? :)

[@DariusATent]

Selling less but for more might turn out to be more profitable and who does not want that, right? :)