20 18 N 10 M 14 10 M N O 10 QUANTITY (Units) 12 14 10 18 20 Using the graph, complete the tabie that follows by indicating whether each statement is true or false. Statement True False Curve NN Is more elastic between points A and D than curve MM is between points A and C. Between points A and E, curve 00 is unit elastic. Between points A and C, curve MM is elastic. PRICE (Dolars per unit)
Price elasticity of demand measures the responsiveness of change in demand of a good to a change in price of that good, keeping other factors constant.
There are five types of elasticity:
Perfectly elastic demand: The horizontal demand curve has perfectly elastic demand. The price elasticity value is infinity.
Perfectly inelastic demand: The vertical demand curve has perfectly inelastic demand. The price elasticity value is zero
Unitary elastic demand: The price elasticity value is one
Elastic demand: The price elasticity value is greater than one.
Inelastic demand: The price elasticity value is less than one.
Note:
Flatter the curve, the demand is relatively elastic
Steeper the curve, the demand is relatively inelastic.
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