Refer to Figure 20.2.Comparing the price elasticity of demand at points A and C, we can say that
A)The elasticities are the same because the points are on the same demand curve.
B)Point A has a greater price elasticity of demand.
C)Point C has a greater price elasticity of demand.
D)Demand elasticity is indeterminate because specific price data are not given.

Question

Refer to Figure 20.2.Comparing the price elasticity of demand at points A and C, we can say that
A)The elasticities are the same because the points are on the same demand curve. 
B)Point A has a greater price elasticity of demand. 
C)Point C has a greater price elasticity of demand. 
D)Demand elasticity is indeterminate because specific price data are not given.

Quizplus · Accepted Answer

At point A, the demand curve is flatter (i.e., closer to being horizontal) than at point C. This means that a given percentage change in price will result in a greater percentage change in quantity demanded at point A, indicating a higher price elasticity of demand at A compared to C.