Use the diagram below to answer this question.
For this demand curve, the price elasticity of demand is
A)more elastic at $3 than at $2.
B)more elastic at $2 than at $3.
C)identical at $2 to that at $3.
D)equal to 1.0 over the range from $3 to $2.

Question

Use the diagram below to answer this question. 
For this demand curve, the price elasticity of demand is
A)more elastic at $3 than at $2. 
B)more elastic at $2 than at $3. 
C)identical at $2 to that at $3. 
D)equal to 1.0 over the range from $3 to $2.

Quizplus · Accepted Answer

The slope of the demand curve is steeper at $2 than at $3, which means that the percentage change in quantity demanded will be greater for a given percentage change in price at $2 than at $3. Therefore, demand is more elastic at $2 than at $3.

Use the Diagram Below to Answer This Question