Figure 6-2 -Refer to Figure 6-2.As price falls from P_A to P_B,the quantity demanded increases most along D₁; therefore, A)D₁ is unit elastic. B)D₁ is more inelastic than D₂ or D₃. C)D₁ is more elastic than D₂ or D₃ D)D₁ is elastic at P_A but inelastic at P_B.

Question

Quizplus · Accepted Answer

When the quantity demanded increases significantly in response to a small decrease in price, it indicates that the demand is relatively elastic. Therefore, as the quantity demanded increases most along D₁, it can be inferred that D₁ is more elastic than D₂ or D₃. Hence, the correct choice is C.

Figure 6-2 -Refer to Figure 6-2.As Price Falls from PA to PB,the

Figure 6-2 -Refer to Figure 6-2.As Price Falls from P_A to P_B,the