Which of the following statements is correct?
A)Arc elasticity of demand is the same as the slope of the demand curve.
B)Arc elasticity of demand only applies to a nonlinear demand curve.
C)Point elasticity of demand is measured at each point along a demand curve.
D)Point elasticity of demand is measured between two adjacent points on a demand curve.

Question

Quizplus · Accepted Answer

Point elasticity of demand is measured at each individual point along a demand curve, while arc elasticity of demand is measured between two points on a demand curve. Option A is incorrect, as slope and elasticity are not equivalent measures; slope measures the change in quantity demanded for a one unit change in price, while elasticity measures the percentage change in quantity demanded for a percentage change in price. Option B is incorrect, as arc elasticity can be calculated for linear or nonlinear demand curves.

Which of the Following Statements Is Correct