Question

Draw a straight-line demand curve joining both the axes. Indicate the following on the demand curve.

Elasticity of demand is greater than one

Answer 1

A straight-line demand curve joining both the axes is shown below:

The elasticity of demand is different at different points.

`"measured by Elasticity" = "Lower segment of demand curve"/ "Upper segment of demand curve"`

The elasticity of the demand between C and B in the diagram is greater than one because the lower segment is greater than the upper segment.