Question

Observe the following diagram of the non-linear demand curve and answer the questions given below.

1. If EB = EA (Ed = 1) = ______ 
2. If EB > EA (Ed > 1) = ______
3. If EB < EA (Ed < 1) = ______
4. The ‘x’ axis represents ______ of commodity and ‘y’ axis represents ______ of commodity.

Answer 1

1. If EB = EA (Ed = 1) = Unitary elastic demand
2. If EB > EA (Ed > 1) = Relatively elastic demand
3. If EB < EA (Ed < 1) = Relatively inelastic demand
4. The ‘x’ axis represents demand of commodity and ‘y’ axis represents price of commodity.