Question

Examine the chart below, which compares the prices of three different items to the quantities supplied at each price:

Name and define the economic concept being illustrated. Then analyze the chart’s information, and state which item is a) elastic; b) inelastic, or; c) unit elastic, and tell why.

Answer 1

Hello. You have not shown the graph to which this question refers, which makes it impossible for it to be answered accurately, but I will try to help you as best as possible, by giving instructions on how to answer it.

To find the types of elasticity, you have to look in the graph to the values that each curve shows about the% of the quantity change of the product and the% of the price change.

When you find these heats, you should use the following formula for each curve:

Elasticity = (% Change in Quantity) / (% Change in Price)

If the result of this calculation is greater than 1 it means that the curve is elastic, if the result is less than 1, it means that the curve is inelastic and if the result is 1 it means that the curve is unit elastic.