In the graph, between R and M, demand is A straight-line demand curve D from a price of ₹10 (quantity 0) to a quantity of 100 (price 0), Qd = 100 − 10P. Point R is at ₹8 and 20 units, the midpoint M at ₹5 and 50 units, and S at ₹2 and 80 units.

In the graph, between R and M, demand is

Question 48

HardOriginal question

In the graph, between R and M, demand is

A straight-line demand curve D from a price of ₹10 (quantity 0) to a quantity of 100 (price 0), Qd = 100 − 10P. Point R is at ₹8 and 20 units, the midpoint M at ₹5 and 50 units, and S at ₹2 and 80 units.

inelasticCorrect answerYour answerunitary elastic throughoutCorrect answerYour answerelastic, since every point above the midpoint has eₚ > 1Correct answerYour answerperfectly elasticCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer C

Correct answer: C

On a straight-line demand curve, eₚ falls from infinity at the price axis to 1 at the midpoint.
R (eₚ = 4) to M (eₚ = 1) is all on the upper half, so demand is elastic there.

Concept: Upper half of a linear demand curve
Typical timeTypical: 100 s
Your timeYours: —

The rule this testsDegrees of elasticity

Practise this chapter →

Ten questions from Price Elasticity of Demand, at your own pace.

Practise this chapter →

Ten questions from Price Elasticity of Demand, at your own pace.

In the graph, between R and M, demand is

Question 48

Explanation