Consider the following AR and MR curves for a single-price monopolist.
FIGURE 10-2
-Refer to Figure 10-2.The price elasticity of demand at Q1 is

Question

Consider the following AR and MR curves for a single-price monopolist.
  FIGURE 10-2
-Refer to Figure 10-2.The price elasticity of demand at Q1 is

Quizplus · Accepted Answer

The price elasticity of demand at Q1 can be inferred from the slope of the demand curve at that point. Since the demand curve is relatively flat, the elasticity of demand is greater than 1, indicating that a small change in price would lead to a relatively larger change in quantity demanded. Therefore, the best choice is (D) greater than 1.

Consider the Following AR and MR Curves for a Single-Price