A straight-line demand curve with negative slope intersects the horizontal axis at 100 tons per week. At the midpoint on the demand curve (corresponding to 50 tons per week) the price elasticity of demand is
A) 0.
B) 0.5.
C) 1.0.
D) unknown without more information.

Question

Quizplus · Accepted Answer

At the midpoint of a linear demand curve, the price elasticity of demand is equal to 1. This is because the percentage change in quantity demanded is equal to the percentage change in price at this point.

A Straight-Line Demand Curve with Negative Slope Intersects the Horizontal