Scelta multipla
Which of the following best describes the difference between a change in quantity demanded and a change in demand?
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3. Supply and Demand
The Basics of Demand
Scelta multipla
Given four demand curves (ll, mm, nn, and oo) that intersect at point a on a graph, which curve represents the most elastic demand at point a?
A
Curve ll
B
Curve mm
C
Curve oo
D
Curve nn
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Recall that the price elasticity of demand measures how much the quantity demanded responds to a change in price, and it is defined as \(\text{Elasticity} = \left| \frac{\% \text{ change in quantity demanded}}{\% \text{ change in price}} \right|\).
Understand that at the point of intersection (point a), all demand curves share the same price and quantity coordinates, so to compare elasticity, we need to look at the slopes of the curves at that point.
Remember that elasticity is related to the slope of the demand curve: a flatter demand curve at point a indicates a higher elasticity (more responsive quantity demanded to price changes), while a steeper curve indicates lower elasticity.
Compare the slopes of the four curves (ll, mm, nn, oo) at point a by visually assessing which curve is the flattest (least steep) at that point, as the flattest curve corresponds to the highest elasticity.
Identify that the curve labeled nn is the flattest at point a, meaning it has the greatest responsiveness in quantity demanded to price changes, and therefore represents the most elastic demand at point a.
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