Figure 16-1
-Refer to Figure 16-1. Which of the graphs illustrates a relatively elastic, though not perfectly elastic, demand curve consistent with a market that has many substitute products?
A)Panel A
B)Panel B
C)Panel C
D)Panel D

Question

Figure 16-1    
-Refer to Figure 16-1. Which of the graphs illustrates a relatively elastic, though not perfectly elastic, demand curve consistent with a market that has many substitute products?
A)Panel A 
B)Panel B 
C)Panel C 
D)Panel D

Quizplus · Accepted Answer

Panel B shows a relatively elastic demand curve compared to the other panels, as it has a flatter slope. This indicates that there are many substitute products available and consumers are more likely to switch to these substitutes if the price of the product in question increases. However, it is not perfectly elastic as there is still some response to price changes.