If the demand for orange juice is expressed as Q = 2000 - 500p,where Q is measured in gallons and p is measured in dollars,then at the price of $3,the demand curve
A) is elastic.
B) has a unitary elasticity.
C) is inelastic.
D) is perfectly inelastic.

Question

Quizplus · Accepted Answer

The demand curve is elastic because the percentage change in quantity demanded is greater than the percentage change in price, indicated by the negative coefficient of price (-500) in the demand equation Q = 2000 - 500p. Elasticity measures responsiveness, and a high absolute value of the coefficient (in this case, 500) suggests a relatively elastic demand.

If the Demand for Orange Juice Is Expressed as Q