The following graph depicts demand.
Refer to the figure above.At point A,demand is:
A) price inelastic.
B) price elastic.
C) unitary elastic.
D) perfectly price elastic.

Question

The following graph depicts demand. 
Refer to the figure above.At point A,demand is:
A) price inelastic. 
B) price elastic. 
C) unitary elastic. 
D) perfectly price elastic.

Quizplus · Accepted Answer

To find elasticity,use the formula (price/quantity)/slope.Here it is 5/4 × 2 = 5/2.(2 is the reciprocal of 0.5. )This is greater than one,so it is price elastic.

The Following Graph Depicts Demand