Price Elasticity Varies by Good Specificity

Steps:

• Identify elasticity from curve steepness: steeper curves indicate inelastic demand, flatter ones elastic.
• All food is broadest category, so most inelastic (steepest curve, likely X).
• Lamb is narrowest, so most elastic (flattest curve, likely Z).
• Meat is intermediate, so moderately elastic (medium curve, likely Y).

Why A is correct:

• Matches law of demand specificity: elasticity decreases with broader categories, as substitutes abound for specifics like lamb but not necessities like all food.

Why the others are wrong:

• B: Assigns lamb (elastic) to inelastic X, contradicting specificity.
• C: Puts food (inelastic) to medium Y, misaligning broad category elasticity.
• D: Assigns meat (medium) to inelastic X, ignoring its narrower scope than food.

Final answer: A