Sunday

The Demand Curve


Is it true or false to say that Demand 2 is elastic and Demand 1 is inelastic?







It is false - but why?

2 comments:

  1. 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

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  2. Polly, I think you have the curves confused.

    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.

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