If the quantity of dental services demanded increases by 10 percent when the price of dental services falls by 10 percent, is the demand for dental services inelastic, elastic, or unit elastic? The demand for dental services is __ A. price unit elastic when the price falls but price elastic if the price rises B. inelastic C. unit elastic D. elastic

## Step 1<br />The problem involves the concept of price elasticity of demand, which measures the responsiveness of the quantity demanded of a good to a change in its price. The formula for price elasticity of demand is:<br /><br />### **Elasticity = \(\frac{\% \text{ change in quantity demanded}}{\% \text{ change in price}}\)**<br /><br />## Step 2<br />In this problem, the percentage change in quantity demanded is 10% (an increase) and the percentage change in price is also 10% (a decrease). Substituting these values into the formula, we get:<br /><br />### **Elasticity = \(\frac{10\%}{-10\%} = -1\)**<br /><br />## Step 3<br />The negative sign indicates that the price and quantity demanded are moving in opposite directions, which is consistent with the law of demand. The absolute value of the elasticity is 1, which means the demand is unit elastic. This implies that the percentage change in quantity demanded is exactly equal to the percentage change in price.