but i think it is true As for demand 1, a large proportionate change in price leads to only a little proportionate change in quantity demanded.so it is inelastic for demand a samll proportionate change in price(BA) leads to a large proportionate change in demand (Q1Q2
Demand 1 is lower curve and as you can see a large proportionate change in price (from C to A) leads to a large proportionate change in quanity demanded (from Q2 to Q1) therefore it is false to say that Demand 2 is elastic and Demand 1 is inelastic - though looking at the slope of the graph i.e. not analysing you would believe the statement to be true.
but i think it is true
ReplyDeleteAs for demand 1, a large proportionate change in price leads to only a little proportionate change in quantity demanded.so it is inelastic for demand a samll proportionate change in price(BA) leads to a large proportionate change in demand (Q1Q2
Polly, I think you have the curves confused.
ReplyDeleteDemand 1 is lower curve and as you can see a large proportionate change in price (from C to A) leads to a large proportionate change in quanity demanded (from Q2 to Q1) therefore it is false to say that Demand 2 is elastic and Demand 1 is inelastic - though looking at the slope of the graph i.e. not analysing you would believe the statement to be true.