The Great Upheaval. A Spontaneous Eruption. It started with a 10% pay cut. When leaders of the Baltimore and Ohio Railroad Company ordered this second reduction in less than eight months, railroad workers in Martinsburg, West Virginia decided they had had enough.
(1) The Percentage Method: The price elasticity of demand is measured by its coefficient E p. This coefficient E p measures the percentage change in the quantity of a commodity demanded resulting from a given percentage change in its price: Thus. Where q refers to quantity demanded, p to price and â to change. If E p p p = 1 demand is unitary elastic.
1 When the price elasticity of demand for a good is relatively inelastic d. 2  When the price elasticity of demand for a good is unit (or unitary) elastic (E d = 1), the percentage change in quantity is equal to that in price, so a change in price will not affect total revenue. When the price elasticity of demand for a good is relatively elastic d. 2  When the price elasticity of demand for a good is perfectly elastic (E d is â â), any increase in the price, no matter how small, will cause demand for the good to drop to zero. 3  Hence, when the price is raised, the total revenue falls to zero.