Figure 5-11 -Refer to Figure 5-11. Suppose This Demand Curve Is a Curve

question 22

Multiple Choice

Figure 5-11
-Refer to Figure 5-11. Suppose this demand curve is a straight, downward-sloping line all the way from the horizontal intercept to the vertical intercept. We choose two prices, P1 and P2, and the corresponding quantities demanded, Q1 and Q2, for the purpose of calculating the price elasticity of demand. Also suppose P2 > P1. In which of the following cases could we possibly find that (i) demand is elastic and (ii) a decrease in price from P1 to P2 causes an decrease in total revenue?

• A) 0 < P₁ < P₂ < $10.
• B) $10 < P₁ < P₂ $20.
• C) P₁ > $20.
• D) None of the above is correct.

---

Definitions:

Delegator

A person or entity that assigns tasks or duties to another party (the delegatee) while maintaining ultimate responsibility.

Obligation

A duty or commitment requiring an individual or entity to act in a certain way, often legally binding.

Duress

A situation where a person is compelled to perform an act or enter into a contract under threat of violence, harm, or undue pressure.

Doctrine

A system of principles or tenets adopted and propagated by a religious organization, political entity, or similar body.