1. **State the problem:** We are given two demand schedules, Set A and Set B, and asked to graph their demand curves, describe the graphs, and determine the price elasticity of demand for each set. 2. **Recall the formula for price elasticity of demand:** $$E_d = \frac{\% \text{ change in quantity demanded}}{\% \text{ change in price}} = \frac{\frac{Q_2 - Q_1}{Q_1}}{\frac{P_2 - P_1}{P_1}}$$ 3. **Analyze Set A (BOYS):** - Prices: 10, 12, 14, 16, 18 - Quantities: 25, 25, 25, 25, 25 Since quantity demanded remains constant at 25 regardless of price, the demand curve is a horizontal line at quantity = 25. 4. **Elasticity for Set A:** - Because quantity does not change when price changes, the numerator in the elasticity formula is zero. - Therefore, $$E_d = 0$$ - This means demand is perfectly inelastic (quantity demanded does not respond to price changes). 5. **Analyze Set B (GIRLS):** - Prices: 10, 11, 12, 13, 15 - Quantities: 30, 25, 20, 18, 15 The demand curve slopes downward, showing quantity decreases as price increases. 6. **Calculate elasticity between two points for Set B:** - Choose points (P_1=10, Q_1=30) and (P_2=15, Q_2=15) - Calculate percentage changes: $$\% \Delta Q = \frac{15 - 30}{30} = -0.5$$ $$\% \Delta P = \frac{15 - 10}{10} = 0.5$$ - Elasticity: $$E_d = \frac{-0.5}{0.5} = -1$$ 7. **Interpretation for Set B:** - Elasticity of -1 means unit elastic demand; quantity demanded changes proportionally with price. **Final answers:** - Set A demand curve is horizontal at quantity 25 with elasticity $E_d=0$ (perfectly inelastic). - Set B demand curve slopes downward with elasticity $E_d=-1$ (unit elastic).