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Question
Draw a demand curve which has unit elasticity only at one point.
Diagram
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Solution
Price elasticity of demand at different points on a straight line demand curve:
We can use the above method (or formula) of point elasticity for measuring elasticity at different points on a straight line demand curve starting from Y-axis and terminating at X-axis. We can easily explain that the price elasticity of demand at different points of the straight line demand curve is different.
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Chapter 4: Elasticity of Demand - TEST YOURSELF QUESTIONS [Page 74]
