Exhibit 5.3

-Refer to Exhibit 5.3,which shows a linear demand curve.Between points A and B,the elasticity of demand is ____ and demand is _____
A)1; unit elastic.
B)1.89; elastic.
C)0.2; inelastic.
D)infinity; perfectly elastic.
E)1; perfectly inelastic.

Question

Exhibit 5.3
 
-Refer to Exhibit 5.3,which shows a linear demand curve.Between points A and B,the elasticity of demand is ____ and demand is _____
A)1; unit elastic. 
B)1.89; elastic. 
C)0.2; inelastic. 
D)infinity; perfectly elastic. 
E)1; perfectly inelastic.

Quizplus · Accepted Answer

Between points A and B, the slope of the demand curve becomes steeper, indicating an increase in the price elasticity of demand. As the elasticity of demand is greater than 1, demand is elastic, meaning a small change in price results in a relatively larger change in quantity demanded.

Exhibit 5.3 -Refer to Exhibit 5.3,which Shows a Linear Demand Curve.Between Points