Which statement about price elasticity of demand along a linear demand curve is true?
A) As the quantity demanded increases, so does the buyer's sensitivity to price.
B) When price elasticity of demand is equal to 1, consumers are indifferent to subtle price changes.
C) The ratio of current price to quantity demanded is a good estimate of the elasticity of demand.
D) The elasticity of demand is less elastic at a lower price.

Question

Quizplus · Accepted Answer

The elasticity of demand varies along a linear demand curve; it is more elastic (sensitive to price changes) at higher prices and quantities, and becomes less elastic as the price decreases and quantity increases. This is because the percentage change in quantity demanded is larger at higher prices for the same absolute change in price, and smaller at lower prices.

Which Statement About Price Elasticity of Demand Along a Linear