A-LevelEconomicsThe price system and the microeconomy9708/12 · Oct/Nov 2017 · Q71 Mark
In the diagram D₁D₁ is a straight line demand curve and D2D2 is a rectangular hyperbola curve. [Figure showing demand curves D1D1 and D2D2 intersecting at M, with D2D2 also passing through N] Which statement is correct?
This question uses a diagram from the original paper, which isn't shown here. Open the full paper from the past papers archive to see it.
AD2D2 is more elastic than D₁D₁ at point M.
BD2D2 is more elastic than D₁D₁ at point N.
CThe elasticity of demand increases on moving down both curves.
DThe elasticity of demand is inelastic at point M on both curves.
✓ Correct answer
B: D2D2 is more elastic than D₁D₁ at point N.
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