FIGURE 5-3

-Refer to Figure 5-3. How would price elasticity of demand along a linear demand curve be described?
A) It is always equal to one.
B) It is constant.
C) It is more elastic to the northwest than to the southeast.
D) It is less elastic to the northwest than to the southeast.

Question

FIGURE 5-3
 
-Refer to Figure 5-3. How would price elasticity of demand along a linear demand curve be described?
A) It is always equal to one. 
B) It is constant. 
C) It is more elastic to the northwest than to the southeast. 
D) It is less elastic to the northwest than to the southeast.

Quizplus · Accepted Answer

The price elasticity of demand along a linear demand curve varies: it is more elastic (i.e., consumers are more responsive to price changes) at higher prices and lower quantities (the northwest part of the curve) and less elastic at lower prices and higher quantities (the southeast part of the curve).

FIGURE 5-3 -Refer to Figure 5-3. How Would Price Elasticity of Demand