The following figure shows the demand curve and the marginal revenue curve of a monopolist.On the horizontal axis,OG = GF.
Figure 11-5
-Refer to Figure 11-5.Between points E and A on the demand curve,the price elasticity of demand:
A)is equal to one.
B)exceeds one.
C)is equal to zero.
D)is less than one.

Question

The following figure shows the demand curve and the marginal revenue curve of a monopolist.On the horizontal axis,OG = GF.
Figure 11-5 
-Refer to Figure 11-5.Between points E and A on the demand curve,the price elasticity of demand:
A)is equal to one. 
B)exceeds one. 
C)is equal to zero. 
D)is less than one.

Quizplus · Accepted Answer

Between points E and A on the demand curve, the price elasticity of demand exceeds one. This means that a small increase in price will lead to a relatively larger decrease in the quantity demanded. In other words, demand is relatively sensitive to price changes in this range, indicating a relatively elastic demand.

The Following Figure Shows the Demand Curve and the Marginal