Figure 5-3
-Refer to Figure 5-3.Between point A and point B,
A) the slope is equal to -1/4 and the price elasticity of demand is equal to 2/3.
B) the slope is equal to -1/4 and the price elasticity of demand is equal to 3/2.
C) the slope is equal to -3/2 and the price elasticity of demand is equal to 1/4.
D) the slope is equal to -2/3 and the price elasticity of demand is equal to 3/2.

Question

Figure 5-3 
-Refer to Figure 5-3.Between point A and point B,
A) the slope is equal to -1/4 and the price elasticity of demand is equal to 2/3. 
B) the slope is equal to -1/4 and the price elasticity of demand is equal to 3/2. 
C) the slope is equal to -3/2 and the price elasticity of demand is equal to 1/4. 
D) the slope is equal to -2/3 and the price elasticity of demand is equal to 3/2.

Quizplus · Accepted Answer

Between point A and point B, the slope of the demand curve is equal to -1/4, as it represents the change in price over the change in quantity demanded. The price elasticity of demand is equal to the absolute value of (change in quantity demanded / average quantity demanded) divided by (change in price / average price). Using the coordinates of point A and B, we can calculate the price elasticity of demand between these two points as [(300-200)/250]/[(2-4)/3] = 3/2. Therefore, the correct answer is B: the slope is equal to -1/4, and the price elasticity of demand is equal to 3/2.

Figure 5-3 -Refer to Figure 5-3.Between Point a and Point B