Answer to Question #316352 in Microeconomics for Gean

Question

Calculate elasticity at every point on the graph, and state if it is elastic, inelastic or unitary elastic.

Answer 1

Point elasticity is the price elasticity of demand at a specific point on the demand curve instead of over a range of it.

If the value is less than 1, demand is inelastic. In other words, quantity changes slower than price. If the number is equal to 1, elasticity of demand is unitary. In other words, quantity changes at the same rate as price.