Identify the correct statement about the price elasticity of demand and the demand curve for a good.
A)The slope of the demand curve is always equal to the elasticity of demand.
B)Moving down along a downward-sloping, linear demand curve, the elasticity of demand increases.
C)The flatter the demand curve passing through a given point, the more elastic the demand.
D)The steeper the demand curve passing through a given point, the more elastic the demand.
E)The price elasticity of demand is, in theory, always positive.

Question

Quizplus · Accepted Answer

The flatter the demand curve passing through a given point, the more responsive consumers are to changes in price, and therefore, the more elastic the demand. The slope of the demand curve is not always equal to the elasticity of demand, and moving down a downward-sloping, linear demand curve does not necessarily lead to an increase in elasticity of demand. The steeper the demand curve passing through a given point, the more inelastic the demand. Finally, the price elasticity of demand can be negative for inferior goods.

Identify the Correct Statement About the Price Elasticity of Demand