<p>Assuming you mean unit <em>elasticity of demand with respect to price</em> the answer is yes.</p>
<p>From the information you have, we can deduce that the demand function is as follows:</p>
<p><span class="math-container">$$Q^d(p)=10/p$$</span> (I always spend <span class="math-container">$\\\$ 10$</span> on coffee, which buys me exactly <span class="math-container">$10/p$</span> units of coffee, where <span class="math-container">$p$</span> is the price of coffee).</p>
<p>Now recall the formula for computing elasticity of demand with respect to price:</p>
<p><span class="math-container">$$\varepsilon \equiv \frac{dQ^d}{dp} \frac{p}{Q^d}$$</span></p>
<p>And the rest I leave to you.</p>

CC BY-SA 4.0
2021-05-23T14:44:34.497Z
2021-05-23T14:44:34.497Z
user18214
<p>If I always spend a total of exactly <span class="math-container">$\\\$10$</span> per week on coffee, then does my demand function have unit elasticity?</p>
<p>According to me, the change in income doesn't affect my coffee consumption, so it does not seem like unit elasticity. Can someone help me understand this?</p>

CC BY-SA 4.0
2021-05-23T12:48:12.260Z
Could you please clarify two points: 1) Do you mean exactly \$10 per week whatever the price of coffee that week may be? 2) Are you asking about price elasticity of demand or income elasticity of demand?
Adam Bailey
<microeconomics><demand>
Why it is unit elasticity
BerZerk Sharma
# Why it is unit elasticity

(Asked by: username_0 on 2021-05-23)

If I always spend a total of exactly $\\\$10$ per week on coffee, then does my demand function have unit elasticity?

According to me, the change in income doesn't affect my coffee consumption, so it does not seem like unit elasticity. Can someone help me understand this?

**Tags:** microeconomics, demand
> **Comments:**
> **username_1**: Could you please clarify two points: 1) Do you mean exactly \$10 per week whatever the price of coffee that week may be? 2) Are you asking about price elasticity of demand or income elasticity of demand?  

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## 1 answers

### Answer by username_2 on 2021-05-23. Score: 4 | Accepted answer

Assuming you mean unit *elasticity of demand with respect to price* the answer is yes.

From the information you have, we can deduce that the demand function is as follows:

$$Q^d(p)=10/p$$ (I always spend $\\\$ 10$ on coffee, which buys me exactly $10/p$ units of coffee, where $p$ is the price of coffee).

Now recall the formula for computing elasticity of demand with respect to price:

$$\varepsilon \equiv \frac{dQ^d}{dp} \frac{p}{Q^d}$$

And the rest I leave to you.


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