Is it true or false to say that the curve Demand 2 is elastic and Demand 1 is inelastic?
This is a basic basic question - surely everyone knows the answer?
If studying Economics then this is one of the first things you learn!
And here's the answer:
The price elasticity of demand decreases as you move down a straight-line demand ‘curve’, so you can only compare elasticity at particular points on the two curves or over particular segments.
12 comments:
I think it's false.
Because in my opinion both of them are elastic
i think the demand 2 is inelastic and demand 1 is elastic, because the price of demand 2 is lower than demand 1 and the the quantity of demand 2 is more than demand 1, so demand 2 is inelastic and demand 1 is elastic.
False!
Sadly the A2 student is wrong - think again.
true? Maybe~
true ? maybe~
true? maybe~
It's not enough to conclude!!!!!!!!!
It can be both....hahahahaha
Sharp Mr.Chris:))))
False, in my opinion both of them are inelastic, because demand 2 is passing point A and B, which means, the prices are higher, but there is still demand as we can see. People are still buying that supply, no matter that the price is rising.
It's true, I think.. =)
The angle that is formed by the line of Demand and the line that indicates price A will be 90 degrees for a perfectly inelastic demand (vertical line) and would be 0 degrees for a perfectly inelastic demand (horizontal line). Therefore, I think, if the angle being formed between price line A and Demand is smaller than 45 degrees, the demand is elastic. If the angle is bigger than 45 degrees, the demand is inelastic.
Demand 1 is inelastic. The angle formed between line A and Demand 1 is bigger than 45 degrees, as line AC is bigger than line Q1Q2. Because the angle is bigger than 45 degrees, Demand 1 is inelastic.
Demand 2 is elastic, for sure. The angle formed between line A and Demand 2 is smaller than 45 degrees, as line AB is smaller than line Q1Q2. Because the angle is smaller than 45 degrees, Demand 2 is elastic.
Therefore it's true!
This is an mathematical explanation to this question I came up with.. I hope it makes sense!
ok my answer is wroong! chris just told me!
The price elasticity of demand decreases as you move down a straight-line demand ‘curve’, so you can only compare elasticity at particular points on the two curves or over particular segments.
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