Figure 4.6 -Refer to Figure 4.6.As price falls from P_A to P_B,the quantity demanded increases most along D₁_;therefore,_________. A) D₁is unit-elastic B) D₁ is more inelastic than D₂or D₃ C) D₁ is more elastic than D₂or D₃ D) D₁ is elastic at P_A but inelastic at P_B

Question

Quizplus · Accepted Answer

As the quantity demanded increases most along DS1U1B11S1U1B0S1U1B1, it means that it is more responsive to the change in price, hence more elastic. Therefore, the option (C) is correct. Option (A) is incorrect as the demand is not unit elastic. Option (B) is also incorrect as there is no information to support it. Option (D) is incorrect as the demand along DS1U1B11S1U1B0 is more responsive to price change at PS1U1B1BS1U1B0, hence it is more elastic.

Figure 4.6 -Refer to Figure 4.6.As Price Falls from PA to PB,the

Figure 4.6 -Refer to Figure 4.6.As Price Falls from P_A to P_B,the