If the price elasticity of demand for a product is 1 in absolute value, and the price elasticity of supply of the same product is 1, what is the predicted percent change in price from a 1 percent increase in demand?

a 1% decrease in price

Explanation:

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.

Price elasticity of demand = percentage change in quantity demanded / percentage change in price

Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded

Unit elastic demand = percentage change in quantity demanded / percentage change in price = 1

According to the law of demand, the higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded.

It follows that if price increases by 1%, quantity demanded would fall by 1% since demand is unit elastic

answer; break-even analysis;