Refer to the accompanying figure. When P = 4, the price elasticity of demand for the demand curve D1 is ________ and D2 is ________.
A)3; 3
B)2/3; 1/3
C)1/3; 3
D)1/3; 2/3

Question

Refer to the accompanying figure. When P = 4, the price elasticity of demand for the demand curve D1 is ________ and D2 is ________. 
A)3; 3 
B)2/3; 1/3 
C)1/3; 3 
D)1/3; 2/3

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 4, (4/6)× (1/2)= 1/3, and for D2, at a price of 4 (4/12)× (1/0.5)= 2/3.

Refer to the Accompanying Figure