Refer to the Figure Below

question 78

Multiple Choice

Refer to the figure below. At P = 4, how does the price elasticity of demand for D1 compare to that for D2?

• A)It will be equal for D1 and D2.
• B)It will be greater for D1 than for D2.
• C)It will be lower for D1 than D2.
• D)The price elasticity of demand for both D1 and D2 will be greater than one.

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Definitions:

Bottled Air

Commercially packaged air, often marketed as pure or from a specific location, sold for personal inhalation.

Doubles

Doubles generally refers to a situation or quantity that is twice as large as a reference or starting point.

Perfectly Elastic

A situation in economics where the quantity demanded or supplied responds infinitely or substantially to a change in price.

Tax Burden

The total amount of taxes paid by individuals or businesses, often expressed as a percentage of income or GDP.