results in a quantity change of one percent. Figure 5.6 shows a demand curve with constant unit elasticity.

Using the midpoint method, you can calculate that between points A and B on the demand curve, the price

changes by 66.7% and quantity demanded also changes by 66.7%. Hence, the elasticity equals 1. Between

points B and C, price again changes by 66.7% as does quantity, while between points C and D the

corresponding percentage changes are again 66.7% for both price and quantity. In each case, then, the

percentage change in price equals the percentage change in quantity, and consequently elasticity equals 1.

Notice that in absolute value, the declines in price, as you step down the demand curve, are not identical.

Instead, the price falls by $8.00 from A to B, by a smaller amount of $4.00 from B to C, and by a still smaller

amount of $2.00 from C to D. As a result, a demand curve with constant unitary elasticity moves from a steeper
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