Unitary elasticity of demand refers to a proportionate change in price and quantity demanded. This means that if the price of a good increases by 10%, the quantity demanded will decrease by 10%. This type of elasticity is considered to be “neutral” because the change in price has no net effect on the total revenue of the firm.
A more than proportionate change in price would mean that the quantity demanded decreases by more than 10% when the price increases by 10%. This type of elasticity is considered to be “elastic” because the change in price has a negative effect on the total revenue of the firm.
A less than proportionate change in price would mean that the quantity demanded decreases by less than 10% when the price increases by 10%. This type of elasticity is considered to be “inelastic” because the change in price has a positive effect on the total revenue of the firm.
Therefore, the correct answer is A.