Refer to Figure 20.2.If the area 0P₁AB is less than the area 0P₂CD,we can conclude that the price elasticity of demand between point A and point C is A)Elastic. B)Inelastic. C)Unitary elastic. D)Impossible to determine.It depends on whether the price has increased or decreased.

Question

Quizplus · Accepted Answer

If the area 0P₁AB is less than the area 0P₂CD, it means that the percentage change in quantity demanded (from A to C) is greater than the percentage change in price. This indicates that demand is responsive to price changes, or in other words, elastic. Therefore, the best choice is A.