Figure 5-4
-Refer to Figure 5-4.Suppose the point labeled B is the "halfway point" on the demand curve and it corresponds to a price of $5.00.Then,between prices of $4.99 and $5.01,the price elasticity of demand is
A)less than 1 but greater than zero.
B)equal to 1.
C)greater than 1.
D)equal to zero.

Question

Figure 5-4 
-Refer to Figure 5-4.Suppose the point labeled B is the "halfway point" on the demand curve and it corresponds to a price of $5.00.Then,between prices of $4.99 and $5.01,the price elasticity of demand is
A)less than 1 but greater than zero. 
B)equal to 1. 
C)greater than 1. 
D)equal to zero.

Quizplus · Accepted Answer

If point B is the halfway point on the demand curve, then the price elasticity of demand at that point would be exactly one. This is because the demand curve is symmetric around the midpoint, which implies that the percentage change in quantity demanded in response to a given percentage change in price would be the same on either side of the midpoint. Thus, between prices of $4.99 and $5.01, the price elasticity of demand would be exactly one.

Figure 5-4 -Refer to Figure 5-4.Suppose the Point Labeled B Is the B