1. **Problem Statement:** We are given two demand schedules, Set A and Set B, and asked to graph the demand curves, describe them, and determine the price elasticity of demand for each set. 2. **Set A Demand Schedule:** Price: 10, 12, 14, 16, 18 Quantity: 25, 25, 25, 25, 25 3. **Graph Description for Set A:** The demand curve is a horizontal line at Quantity = 25, meaning quantity demanded does not change as price changes. 4. **Elasticity Formula:** Price elasticity of demand is given by: $$E_d = \frac{\% \text{ change in quantity demanded}}{\% \text{ change in price}} = \frac{\frac{\Delta Q}{Q}}{\frac{\Delta P}{P}}$$ 5. **Elasticity Calculation for Set A:** Since quantity does not change ($\Delta Q = 0$), the numerator is zero: $$E_d = \frac{0}{\frac{\Delta P}{P}} = 0$$ This means demand is perfectly inelastic. 6. **Set B Demand Schedule:** Price: 10, 11, 12, 13, 15 Quantity: 30, 25, 20, 18, 15 7. **Graph Description for Set B:** The demand curve slopes downward from (Price=10, Quantity=30) to (Price=15, Quantity=15), showing quantity decreases as price increases. 8. **Elasticity Calculation for Set B:** Calculate elasticity between Price 10 and 15: $$\Delta Q = 15 - 30 = -15$$ $$\Delta P = 15 - 10 = 5$$ Average Quantity $Q_{avg} = \frac{30 + 15}{2} = 22.5$ Average Price $P_{avg} = \frac{10 + 15}{2} = 12.5$ Percentage changes: $$\frac{\Delta Q}{Q_{avg}} = \frac{-15}{22.5} = -0.6667$$ $$\frac{\Delta P}{P_{avg}} = \frac{5}{12.5} = 0.4$$ Elasticity: $$E_d = \frac{-0.6667}{0.4} = -1.6667$$ The absolute value $|E_d| = 1.6667 > 1$, so demand is elastic. **Final answers:** - Set A: Perfectly inelastic demand ($E_d = 0$). - Set B: Elastic demand ($E_d \approx -1.67$).