In the following diagram AE is the linear demand curve of a commodity.

1.	In the following diagram AE is the linear demand curve of a commodity. On the basis of the given diagram state whether the following statements are True or False. Give reasons to your answer.(1) Demand at point 'C' is relatively elastic demand. (2) Demand at point 'B' is unitaiy elastic demand. (3) Demand at point 'D' is perfectly inelastic demand. (4) Demand at point 'A' is perfectly elastic demand.
Answer» 1. Demand at point 'C' is relatively elastic demand. 2. False, it is relatively inelastic demand. 3. False, it is relatively elastic demand. 4. False, it is unitary elastic demand. 5. True, it is perfectly elastic Ed = ∞

In the following diagram AE is the linear demand curve of a commodity. On the basis of the given diagram state whether the following statements are True or False. Give reasons to your answer.(1) Demand at point 'C' is relatively elastic demand. (2) Demand at point 'B' is unitaiy elastic demand. (3) Demand at point 'D' is perfectly inelastic demand. (4) Demand at point 'A' is perfectly elastic demand.

Answer»

1. Demand at point 'C' is relatively elastic demand.

2. False, it is relatively inelastic demand.

3. False, it is relatively elastic demand.

4. False, it is unitary elastic demand.

5. True, it is perfectly elastic Ed = ∞