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

Quizplus · Accepted Answer

The formula to use is (price/quantity)/slope.Here it is 2/10 times 2 = 2/5 (2 is the reciprocal of 0.5. ),less than one,so demand is price inelastic at that point.

The Following Graph Depicts Demand