Reference: Ref 5-5 (Figure: Calculating Elasticities) Refer to the figure. The elasticity of demand in the left panel is ________ the elasticity of demand in the right panel.
A) greater than
B) less than
C) equal to
D) a long-run version of

Question

Reference: Ref 5-5 (Figure: Calculating Elasticities) Refer to the figure. The elasticity of demand in the left panel is ________ the elasticity of demand in the right panel.
A) greater than 
B) less than 
C) equal to 
D) a long-run version of

Quizplus · Accepted Answer

The elasticity of demand in the left panel is steeper (i.e., more negative) than the elasticity of demand in the right panel. This means that the left panel has a higher magnitude of elasticity than the right panel, indicating that a given percentage change in price would result in a larger percentage change in quantity demanded in the left panel compared to the right panel. Therefore, option B, less than, is the best choice.

Reference: Ref 5-5 (Figure: Calculating Elasticities) Refer to the Figure