Exhibit 3-3 Demand Curves

question 336

Multiple Choice

Exhibit 3-3 Demand curves
-Which of the graphs in Exhibit 3-3 depicts the effect of a decrease in the price of pizza on the demand curve for pizza?

• A) Graph A.
• B) Graph B
• C) Graph C.
• D) Graph D.

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Definitions:

Elastic

Elasticity in economics refers to the responsiveness of demand or supply to changes in price or income.

Completely Inelastic

Describes a situation where the demand or supply for a good or service does not change in response to changes in price.

Inelastic

Describes a situation where the demand or supply for a good or service is relatively unresponsive to changes in price.

Elastic

Describes a situation in economics where the supply or demand for a good or service significantly changes in response to changes in price.