Figure 7-6

-Refer to Figure 7-6.Which of the following statements is true about the price elasticity of demand?
A)The elasticity coefficient is constant along the demand curve.
B)The elastic portion of a straight-line downward sloping demand curve corresponds to the segment above the midpoint.
C)The inelastic portion of the demand curve corresponds to the segment above the midpoint.
D)At the midpoint of the demand curve, the elasticity coefficient is zero.

Question

Figure 7-6
 
-Refer to Figure 7-6.Which of the following statements is true about the price elasticity of demand?
A)The elasticity coefficient is constant along the demand curve. 
B)The elastic portion of a straight-line downward sloping demand curve corresponds to the segment above the midpoint. 
C)The inelastic portion of the demand curve corresponds to the segment above the midpoint. 
D)At the midpoint of the demand curve, the elasticity coefficient is zero.

Quizplus · Accepted Answer

The elastic portion of a demand curve corresponds to the segment above the midpoint. In this figure, the midpoint is where the demand curve intersects with the price axis, and the elastic portion is above this point. The elasticity coefficient changes along the demand curve, with the highest elasticity being at the upper portion (the most responsive to price changes), and the lowest being at the lower portion (the least responsive to price changes). Therefore, statement A and C are incorrect. The elasticity coefficient is not zero at the midpoint, so statement D is also incorrect.

Figure 7-6 -Refer to Figure 7-6.Which of the Following Statements Is True