Answer the question on the basis of the following demand schedule: $Demanded‾$615243342516\begin{array}{l}\begin{array}{ccc}&\text { Quantity }\\\underline{\text { Price} } & \underline{\text { Demanded}} \\\$6 & 1 \\5 & 2 \\4 & 3 \\3 & 4 \\2 & 5 \\1 & 6\end{array}\end{array}$ Refer to the data.The price elasticity of demand is relatively elastic:

A) in the $6-$4 price range.
B) over the entire $6-$1 price range.
C) in the $3-$1 price range.
D) in the $6-$5 price range only.

Question

Answer the question on the basis of the following demand schedule:

Demanded‾$615243342516\begin{array}{l}\begin{array}{ccc}&\text { Quantity }\\\underline{\text { Price} } & \underline{\text { Demanded}} \\\$6 & 1 \\5 & 2 \\4 & 3 \\3 & 4 \\2 & 5 \\1 & 6\end{array}\end{array}

Refer to the data.The price elasticity of demand is relatively elastic:

A) in the $6-$4 price range.
B) over the entire $6-$1 price range.
C) in the $3-$1 price range.
D) in the $6-$5 price range only.

favanjot singh · Accepted Answer

Final Answer : A, Explanation :  The price elasticity of demand is considered relatively elastic when a small change in price leads to a larger change in quantity demanded. In the $6-$4 price range, the price decreases by $2 (from $6 to $4), and the quantity demanded increases from 1 to 3 units, which is a relatively large change, indicating elasticity.

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