Figure 5-1
-Refer to Figure 5-1. Between point A and point B on the graph, demand is
A) perfectly elastic.
B) inelastic.
C) unit elastic.
D) elastic, but not perfectly elastid.

Question

Figure 5-1 
-Refer to Figure 5-1. Between point A and point B on the graph, demand is
A) perfectly elastic. 
B) inelastic. 
C) unit elastic. 
D) elastic, but not perfectly elastid.

Quizplus · Accepted Answer

Since the slope of the demand curve between points A and B is constantly decreasing, demand is becoming more responsive to price changes. This indicates that demand is elastic. However, since the slope is not horizontal, demand is not perfectly elastic. Therefore, option D, elastic but not perfectly elastic, is the best choice.

Figure 5-1 -Refer to Figure 5-1. Between Point a and Point B