If two negatively sloped demand curves intersect then elasticity of demand at the point of intersection will bea)Sameb)Differentc)Infinityd)ZeroCorrect answer is option 'B'. Can you explain this answer?

Question

Answer

No. elasticity of demand will me more on a flatter curve than on the steeper curve because since price elasticity of demand = %change in /% change in price and hence in the flatter demand curve the change in price will be lesser which will mean that the change in Quantity will be divided by a smaller number.

Answer

Because of negative slope of demand curve , price and quantity will always change in opposite directions . one change will be positive and other negative , making the measured elasticity of demand negative . so we can say if two negatively sloped demand curve intersect then elasticity of demand at the point of intersection will be different .

this would pose no problems except for two unfortunate habits of economists.First either by carelessness or by design , the minus sign is often dropped and elasticity is reported as a positive number.Second it is almost universal practice when comparing two elasticities to compare their absolute not their algebraic values.

hope it will help u !!!

Answer

Explanation:

When two negatively sloped demand curves intersect, the elasticity of demand at the point of intersection will be different.

Definition of Elasticity of Demand:
Elasticity of demand is a measure of the responsiveness of the quantity demanded to a change in price. It indicates how sensitive the demand for a product is to changes in its price.

Explanation:
When two negatively sloped demand curves intersect, it means that at that particular point, the quantity demanded is the same for both curves, but the prices are different.

Key Points:
- The elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price.
- At the point of intersection, the quantity demanded is the same, but the prices are different, which means there is a different percentage change in price for each demand curve.
- Therefore, the elasticity of demand at the point of intersection will be different for each demand curve.

Example:
Let's consider two negatively sloped demand curves: Demand Curve A and Demand Curve B.

Demand Curve A:
Price = $10
Quantity Demanded = 100 units

Demand Curve B:
Price = $8
Quantity Demanded = 100 units

At the point of intersection, the quantity demanded is the same (100 units), but the prices are different ($10 for Curve A and $8 for Curve B).

To calculate the elasticity of demand, we need to determine the percentage change in quantity demanded and the percentage change in price for each demand curve.

For Curve A:
Percentage Change in Quantity Demanded = (100-100)/100 = 0%
Percentage Change in Price = ($10-$8)/$10 = 20%

For Curve B:
Percentage Change in Quantity Demanded = (100-100)/100 = 0%
Percentage Change in Price = ($8-$10)/$8 = -20%

As we can see, the percentage change in price is different for each demand curve, which means the elasticity of demand at the point of intersection will be different.

Therefore, the correct answer is option 'B' - Different.

Top Courses for CommerceView all

Business Studies (BST) Class 12

Economics Class 12

Accountancy Class 12

Economics Class 11

Business Studies (BST) Class 11

Top Courses for Commerce

Top Courses for Commerce

Related Content

Commerce Courses

Other Courses

How To Prepare?

Related Exams

Company