For a linear demand curve,
A)elasticity is constant along the curve.
B)elasticity is unity at every point on the curve.
C)demand is elastic at relatively low prices.
D)demand is elastic at relatively high prices.

Question

Quizplus · Accepted Answer

For a linear demand curve, demand is elastic at relatively high prices and inelastic at relatively low prices. This is because the price elasticity of demand measures the responsiveness of quantity demanded to a change in price, and for a straight-line demand curve, this responsiveness varies along the curve. At high prices (and low quantities), small changes in price lead to relatively larger changes in quantity demanded, making demand elastic.

For a Linear Demand Curve