Figure 5-2
-Refer to Figure 5-2. As price falls from Pa to Pb, we could use the three demand curves to calculate three different values of the price elasticity of demand. Which of the three demand curves would produce the smallest elasticity?
A) D1
B) D2
C) D3
D) All of the above are equally elastid.

Question

Figure 5-2 
-Refer to Figure 5-2. As price falls from Pa to Pb, we could use the three demand curves to calculate three different values of the price elasticity of demand. Which of the three demand curves would produce the smallest elasticity?
A) D1 
B) D2 
C) D3 
D) All of the above are equally elastid.

Quizplus · Accepted Answer

The demand curve D3 is the steepest of the three and therefore has the lowest elasticity of demand. As price decreases along D3, quantity demanded does not increase at the same rate, resulting in a smaller percentage change in quantity demanded in response to a given percentage change in price.

Figure 5-2 -Refer to Figure 5-2. as Price Falls from Pa to from Pa