Question

Demarcus says that he will spend exactly $25 each month on new apps for his mobile device, regardless of the price of apps. Demarcus's demand for apps is a. perfectly elastic. b. unit elastic. c. perfectly inelastic. d. somewhat inelastic, but not perfectly inelastic.

Answer 1

Demarcus's demand for apps is unit elastic

Explanation:

Unit elastic demand is an economic model which assumes that price changes would cause the necessary quantity to be equivalent in proportional.

There is dynamic competition that adjusts proportion to a change in price. A unit elastic demand is a result of price changes because customers have small alternatives that meet their needs.

Likewise, an elastic unit supply results in a price change when near supplies of substitutes are made.

Since a price change in the product corresponds to the same percentage growth in the amount demanded or given, the market elasticity is equal to-1 (Ed= -1) as well as the supply unit elasticity is equivalent to 1 (Es= 1).