-Refer to Figure 5.2.Using the initial-value method,the value of the price elasticity of demand from point A to point B can be described as:
A)elastic.
B)inelastic.
C)unitary.
D)zero.

Question

-Refer to Figure 5.2.Using the initial-value method,the value of the price elasticity of demand from point A to point B can be described as:
A)elastic. 
B)inelastic. 
C)unitary. 
D)zero.

Quizplus · Accepted Answer

The initial-value method calculates elasticity based on the percentage change in quantity demanded and price from the initial point. If the elasticity is greater than 1, it is elastic.