Which of the following best describes unitary elastic demand?

Unitary elastic demand is characterized by a specific relationship between price and quantity demanded. When demand is unitary elastic, it means that the percentage change in quantity demanded is exactly equal to the percentage change in price. This means that if the price of a good increases by a certain percentage, the quantity demanded will decrease by the same percentage, and vice versa. This relationship reflects a balanced responsiveness in quantity demanded relative to price changes.

Understanding this concept is crucial because it illustrates how consumers react to price changes in such a way that total revenue remains unchanged. When demand is unitary elastic, changes in price do not lead to an increase or decrease in total revenue, making it a vital concept in pricing strategies for businesses.