Observe the following diagram of non-linear demand curve and answer the questions given below.[Figure: Price of commodity on the Y-axis and demand of commodity on the X-axis. A non-linear (convex) demand curve dd1 touches a straight line AB at point…

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Q.5 (ii) Observe the following diagram of non-linear demand curve and answer the questions given below. [Figure: Price of commodity on the Y-axis and demand of commodity on the X-axis. A non-linear (convex) demand curve dd₁ touches a straight line AB at point E; A is on the Y-axis and B on the X-axis. From E, a dashed line meets the Y-axis at P and another dashed line meets the X-axis at Q.] (1) If EB = EA (Ed = 1) = ........ (1) (2) If EB > EA (Ed > 1) = ........ (1) (3) If EB < EA (Ed < 1) = ........ (1) (4) The ‘x’ axis represents ........ of commodity and ‘y’ axis represents ........ of commodity. (1)

Doubtly AI · Accepted Answer

Answer: (1) Unitary elastic demand (2) Relatively elastic demand (3) Relatively inelastic demand (4) X-axis: demand (quantity demanded); Y-axis: price. By the point (geometric) method, elasticity at point E on a non-linear demand curve is found by drawing a tangent AB at E: E_d = Lower segment/Upper segment = EB/EA . If EB = EA, E_d = 1 : unitary elastic demand. If EB > EA, E_d gt 1 : relatively elastic demand. If EB < EA, E_d lt 1 : relatively inelastic demand. The X-axis represents the demand (quantity demanded) of the commodity and the Y-axis represents the price of the commodity.

Observe the following diagram of non-linear demand curve and answer the questions given below.[Figure: Price of commodity on the Y-axis and demand of commodity on the X-axis. A non-linear (convex) demand curve dd1 touches a straight line AB at point…

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