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    Question

    Which among the following statement is

    INCORRECT?
    A On a linear demand curve, all the five forms of elasticity can be depicted Correct Answer Incorrect Answer
    B If two demand curves are linear and intersecting each other then coefficient of elasticity would be same on different demand curves at the point of intersection. Correct Answer Incorrect Answer
    C If two demand curves are linear, and parallel to each other then at a particular price the coefficient of elasticity would be different on different demand curves Correct Answer Incorrect Answer
    D The price elasticity of demand is expressed in terms of relative not absolute, changes in Price and quantity demanded Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    The coefficient of elasticity of demand measures the responsiveness of quantity demanded to a change in price, calculated as the percentage change in quantity divided by the percentage change in price ((dq/dp). At the intersection point, elasticity differs because elasticity depends on slope and price-quantity ratio, which differ for different curves. The formula for point elasticity isĀ  Ā  Ā  Ā EP =Ā  At the point of intersection, the price (p) and quantity (q) are identical for both curves. However, since the curves intersect, they must have different slopes. The flatter curve has a higher responsiveness, making it more elastic than the steeper curve at that specific point.

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