yksikköelastisuus

Yksikköelastisuus refers to a specific point on a demand curve where the price elasticity of demand is exactly equal to one. This means that a percentage change in price leads to an equal percentage change in the quantity demanded. At this point, the total revenue, which is the product of price and quantity, remains unchanged when the price is adjusted. If the price increases by a certain percentage, the quantity demanded will decrease by the same percentage, resulting in the same total revenue. Conversely, if the price decreases, the quantity demanded will increase by the same percentage, again leaving total revenue constant.

The concept of unit elasticity is crucial in understanding the relationship between price changes and consumer spending. It helps businesses predict how changes in their pricing strategies will affect their overall revenue. While the entire demand curve may not be unit elastic, there are specific points along it where this condition holds true. Demand curves that are linear and downward-sloping typically exhibit unit elasticity at their midpoint. Understanding where unit elasticity occurs on a demand curve allows for more informed decision-making regarding pricing and its impact on revenue.