Question : Which of the following statements is FALSE?
A: All five types of elasticity can be depicted on a linear demand curve.'
B: If two demand curves are linear and intersect, the coefficient of elasticity on the different demand curves at the point of intersection will be the same.
C: If two demand curves are linear and parallel to each other, the coefficient of elasticity on each demand curve will be different at a given price.
Option 1: Only A correct
Option 2: Only B correct
Option 3: Only C correct
Option 4: A, B, and C all are correct
Correct Answer: Only C correct
Solution :
The coefficient of elasticity is the percentage change in quantity demanded divided by the percentage change in price. As a result, two linear and parallel demand curves will have the same coefficient of elasticity, and price changes will be proportional to changes in the quantity demanded.
Hence option C is false.
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