If the price of a product decreases and total revenue remains unchanged, what type of demand elasticity does the product exhibit?

When the price of a product decreases but total revenue stays the same, it means that the product has unitary elastic demand. This means that the percentage change in the price is exactly balanced by the percentage change in the quantity sold. For example, if a shirt that costs $20 is reduced to $15, and the number of shirts sold increases enough to keep total sales revenue constant, this shows unitary elasticity. In this case, consumers are responsive to price changes, but their buying habits adjust perfectly to keep revenue stable. Understanding this helps businesses know how to price their products to maintain their earnings.