Between points A and E, curve OO is perfectly...

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5. The variety of demand curves The following graph displays four demand curves (LL, MM, NN, and OO) that intersect at point A. Using the graph, complete the table that follows by indicating whether each statement is true or false. Statement True False
Between points A and E, curve OO is perfectly inelastic. Curve MM is less elastic between points A and C than curve NN is between points A and D. Between points A and D, curve NN is elastic. Points: 1 / 1 Close Explanation
Explanation: The price elasticity of demand measures the responsiveness of consumers to changes in price. For example, if consumers change their purchasing behavior very little in response to a drastic change in price, demand is said to be inelastic; but if consumers change their purchasing behavior a lot in response to a small change in price, demand is said to be elastic. An economist would say that the flatter demand curve is relatively elastic, whereas the steeper demand curve is relatively inelastic.

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