Use the following for questions 124-127.
Exhibit: Estimating Price Elasticity

-(Exhibit: Estimating Price Elasticity) Between the two prices, P₁ and P₂, the absolute value of the price elasticity of demand is ________ for D₂.
A) 0
B) greater than 1
C) equal to 1
D) greater than 0 but less than 1

Question

Use the following for questions 124-127.
Exhibit: Estimating Price Elasticity
 
-(Exhibit: Estimating Price Elasticity) Between the two prices, P₁ and P₂, the absolute value of the price elasticity of demand is ________ for D₂.
A) 0 
B) greater than 1 
C) equal to 1 
D) greater than 0 but less than 1

Quizplus · Accepted Answer

From the graph, we can see that the demand curve for D₂ is relatively flat, meaning that a change in price will result in a large change in quantity demanded. Therefore, the absolute value of the price elasticity of demand will be greater than 1.

Use the Following for Questions 124-127