FIGURE 4- 1
-Refer to Figure 4- 1, which shows two demand curves, one linear and the other a rectangular hyperbola. In diagram 1, the price elasticity of demand
A) at point A is equal to that at point C.
B) is equal at points A, B, and C.
C) at point A is greater than at point C.
D) at point A is less than at point C.
E) at point A is equal to that at point B.

Question

FIGURE 4- 1
-Refer to Figure 4- 1, which shows two demand curves, one linear and the other a rectangular hyperbola. In diagram 1, the price elasticity of demand
A) at point A is equal to that at point C. 
B) is equal at points A, B, and C. 
C) at point A is greater than at point C. 
D) at point A is less than at point C. 
E) at point A is equal to that at point B.

Quizplus · Accepted Answer

In a linear demand curve, the price elasticity of demand decreases as you move down the curve. Therefore, at point A (higher price, lower quantity), the elasticity is greater than at point C (lower price, higher quantity).

FIGURE 4- 1 -Refer to Figure 4- 1, Which Shows Two Demand Curves