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Compare, on two separate graphs, two demand curves, one which is relative price-elastic and the other...

Compare, on two separate graphs, two demand curves, one which is relative price-elastic and the other price-inelastic. Please highlight the markup and verify the relationship between the price elasticity of demand to the markup.

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Answer #1

There are two graphs A shows elastic demand the small changes in the price of the goods leads to greater changes in the demand above graph A the price falls P2 to P1 as result demand increases Q2 Q1 the gap between Q2 to Q1 shows elasticity demand.

The above graph B shows inelasticity of demand falls in the price more P2 to P1 but demand increases Q2 Q1 which is less this is considered as a less elastic demand.The gap between Q2 to Q1 is less and P2 to P1 more shows the inelastic demand.

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