Question

Assuming that point a is unit elastic on both D1 and D2, answer the following questions. You must explain your reasoning to receive credit. (Hint: You can “ex- plain” with an equation.) 1 Is point b more or less elastic than point a? 2 Is point c more or less elastic than point b? 3 Is point c more or less elastic than point d? 4 Is point e more or less elastic than poin d?

Question Pl Assuming that point a is unit elastic on both D1 and D2, answer the following questions. You must explain your reasoning to receive c redit. (Hint: You can "ex plain" with an equation.) Is point b more or less elastic than point a? D2 Is point c more or less elastic than point b? d Is point c more or less elastic than point d? D1 Is point e more or less elastic than poin d? Q

Answer 1

Point Elasticity & to measure point elasticity would be single price and there single pm ť quantity. At point N pe PN 40 AP p a PN OP PS OP

At the mid point or straight line demand b midpoinie=1 ell Care elasticity wowd be unitary and above the mid point it would be greater than one. and less than one below mid point. is Infinity and at point a At point B elasticity elasicity is zero.

Solution a Point B is more elastic than point A. because on a straight line demand Curve at mid-point elasticity equals t which is point a and above the mid-point elasticity is greater than one So at point b elasticity is greater than one. So, b point is more elastic than a. 6) Point c is more elastic than point bb Because a demand Curve which is flatter than other always have greater elasticity or flatter Curre are more elastic because change in quantity due to change in prices are higher in flatter Curve. - So point c is more elastic because its slope is more flatter than De demand Curve,

c) point c is more elastic than point d because at point a which is mida point of both Curve) elastic is one To the right of a A elasticity is lessen than one on both Curves and to the Left or A on both Curves elasticity is greater than one. So, At point c elasticity is greater than One and at point d it is less than One. so point G is more elastic. d) Yes point e is more elastic than point a because it lies on more elastic Curve and both point & are to the weight of mid-point Both points have elasticity less than One but e is more to elastic.