Answer:
a. Curve MM is more elastic between points A and C than curve NN is between points A and D: TRUE
b. Between points A and B, curve LL is unit elastic: FALSE
c. Between points A and D, curve NN is inelastic: TRUE
Explanation:
Elasticity is the responsiveness of quantity demanded or quantity supplied to a change in the price. There are five categories of elasticities:
1. Perfectly elastic: Quantity changes even without a change in price. Curve is a horizontal line.
2. Elastic: Change in price is smaller than a change in quantity. Curve has a smoother slope.
3. Unit elastic: Change in price causes a proportionate change in quantity. Curve is a rectangular hyperbola.
4. Inelastic: Change in price causes a smaller change in quantity. Curve is a steep slope.
5. Perfectly inelastic: Change in price causes no change in quantity. Curve is a vertical line.
