Refer to the above graphs.A price increase from $20 to $40 causes quantity demanded to decrease from 100 units to 50 units.Which graph best illustrates the price elasticity of demand for this good?
A) Graph A
B) Graph B
C) Graph C
D) Graph D

Question

Refer to the above graphs.A price increase from $20 to $40 causes quantity demanded to decrease from 100 units to 50 units.Which graph best illustrates the price elasticity of demand for this good?
A) Graph A 
B) Graph B 
C) Graph C 
D) Graph D

Quizplus · Accepted Answer

Graph B shows a more elastic demand curve, as a small increase in price leads to a relatively large decrease in quantity demanded. This is shown by the flatter slope of the curve. Graphs A, C, and D show more inelastic demand curves, as a price increase leads to a smaller decrease in quantity demanded, shown by the steeper slopes of the curves.

Refer to the Above Graphs