If the absolute value of the slope of the demand curve is 0.25, price is $8 per unit, and quantity demanded is 12 units, then demand for this good is:
A)perfectly elastic.
B)elastic.
C)unit elastic.
D)inelastic.

Question

Quizplus · Accepted Answer

The formula for the price elasticity of demand at a given point is (P/Q)× (1/slope). Here, (8/12)× (1/0.25)= 2.67 (approximately). Since this is greater than 1, we know that the demand for this good is elastic.

If the Absolute Value of the Slope of the Demand