The demand curves for good A and B are depicted in the following graph.We can conclude that ________.

A) the price elasticity of demand for good A is smaller than good B
B) the price elasticity of demand for good A is larger than good B
C) good A is perfectly elastic
D) good A is perfectly inelastic.

Question

The demand curves for good A and B are depicted in the following graph.We can conclude that ________.

A) the price elasticity of demand for good A is smaller than good B 
B) the price elasticity of demand for good A is larger than good B 
C) good A is perfectly elastic 
D) good A is perfectly inelastic.

Quizplus · Accepted Answer

The flatter demand curve for good A suggests that it is more elastic than the steeper demand curve for good B. Therefore, the price elasticity of demand for good A is larger than good B.

The Demand Curves for Good a and B Are Depicted