Exhibit 5.7

-Refer to Exhibit 5.7,which shows four demand curves.At any given price which curve is the most elastic?
A)curve D(1)
B)curve D(2)
C)curve D(3)
D)curve D(4)
E)None of the curves demonstrate elasticity.

Question

Exhibit 5.7
 
-Refer to Exhibit 5.7,which shows four demand curves.At any given price which curve is the most elastic?
A)curve D(1) 
B)curve D(2) 
C)curve D(3) 
D)curve D(4) 
E)None of the curves demonstrate elasticity.

Quizplus · Accepted Answer

The most elastic demand curve is one where a small change in price leads to a large change in quantity demanded. From the given curves, curve D(3) has the steepest slope which means that it has a higher elasticity of demand compared to the other curves. Hence, the answer is C) curve D(3).

Exhibit 5.7 -Refer to Exhibit 5.7,which Shows Four Demand Curves.At Any Given