Arrange the following elasticity degrees along the demand curve in their ascending order.
(A) Elasticity $(e_D) = 1$
(B) Elasticity $(e_D) > 1$
(C) Elasticity $(e_D) < 1$
(D) Elasticity $(e_D) = 0$
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (D), (C), (A), (B)
Along a linear demand curve, the elasticity of demand (eᴅ) changes from top to bottom:
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At the lower end, demand is perfectly inelastic, so eᴅ = 0 → (D)
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Then it becomes inelastic, where eᴅ < 1 → (C)
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At the midpoint, elasticity is unitary, where eᴅ = 1 → (A)
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Toward the upper end, demand is elastic, where eᴅ > 1 → (B)
