Refer to the accompanying figure. When the price is equal to 8, the price elasticity of demand for the demand curve D1 is ________ and for D2 the price elasticity of demand is ________.
A)4; 1
B)1; 4
C)4; 4
D)2; 4

Question

Refer to the accompanying figure. When the price is equal to 8, the price elasticity of demand for the demand curve D1 is ________ and for D2 the price elasticity of demand is ________. 
A)4; 1 
B)1; 4 
C)4; 4 
D)2; 4

Quizplus · Accepted Answer

The formula for the price elasticity of demand at a given point is (P/Q)× (1/slope). For D1, at a price of 8, (8/4)× (1/2)= 1, and for D2. at a price of 8, (8/4)× 2 = 4.

Refer to the Accompanying Figure