Question 15 4 pts The figure given below shows the demand cu

Question 15 4 pts The figure given below shows the demand curves for five products: A, B, C, D, and E Figure 6.1 Ps P2 P1 Refer to Figure 6.1. The value of the coefficient of price elasticity of demand for E is: greater than zero but less than one. equal to 1 equal to zero. equal to infinity. less than 1

Solution

15. Option 4. equal to infinity

Explanation: Elasticity of demand shows the responsiveness of demand for changes in price. The coefficient of the elasticity of demand is determined by dividing the % change in quantity demanded by the % change in price. E is a straight line parallel to the X-axis. It means any quantity can be sold at the P3 price only and any change in price leads to zero demand. So, the % change in demand divided by the % change in price is infinite.

16. Option 2. Satisfaction

Explanation: Utility is the satisfaction which consumers derive by consuming goods.