-Consider the above figure. Which of the following statements is correct? A) In any range of prices encompassing the crossing point of the two demand curves, the price elasticity of demand associated with demand curve D₁ is equal to the price elasticity of demand associated with demand curve D₂. B) In any range of prices encompassing the crossing point of the two demand curves, the price elasticity of demand associated with demand curve D₁ is less than the price elasticity of demand associated with demand curve D₂. C) In any range of prices encompassing the crossing point of the two demand curves, the price elasticity of demand associated with demand curve D₁ is greater than the price elasticity of demand associated with demand curve D₂. D) In any range of prices encompassing the crossing point of the two demand curves, the price elasticity of demand is infinite.

Question

Quizplus · Accepted Answer

At the crossing point, the steeper demand curve (D1) is less elastic than the flatter demand curve (D2), meaning D1 has a greater price elasticity of demand.

-Consider the Above Figure