1.

What will be the price elasticity of demand of the points A, B, L and K in the diagram given below:

Answer»

At point ‘A’, the elasticity of demand will be,

The lower segment of the line/upper segment of line = AK/0 = ∞

At point ‘B’ = BK/AB > 1 i.e. ed > 1 

At point ‘L’ = LK /AK < 1 i.e. ed < 1 

At point ‘K’ = 0/AK = 0 i.e. ed = 0



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