Exhibit 5.3

-Refer to Exhibit 5.3,which shows a linear demand curve.Between points B and C,the elasticity of demand is ____ and demand is _____.
A)1; unit elastic
B)1.89; elastic
C)0.73; 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 B and C,the elasticity of demand is ____ and demand is _____.
A)1; unit elastic 
B)1.89; elastic 
C)0.73; inelastic 
D)infinity; perfectly elastic 
E)1; perfectly inelastic

Quizplus · Accepted Answer

Between points B and C, the slope of the demand curve is steeper, indicating a higher price elasticity of demand. The elasticity of demand can be calculated using the formula: % change in quantity demanded / % change in price. In this case, the % change in quantity demanded is smaller than the % change in price, resulting in an elasticity of demand less than 1 (0.73). This means that demand is relatively inelastic, meaning that a change in price will have a smaller impact on the quantity demanded.

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