Exhibit 4-A
-Refer to Exhibit 4-A.Along a linear demand curve, price elasticity of demand is:
A)constant.
B)more elastic to the northwest than to the southeast.
C)less elastic to the northwest than to the southeast.
D)always equal to one.
E)always equal to zero.

Question

Exhibit 4-A 
-Refer to Exhibit 4-A.Along a linear demand curve, price elasticity of demand is:
A)constant. 
B)more elastic to the northwest than to the southeast. 
C)less elastic to the northwest than to the southeast. 
D)always equal to one. 
E)always equal to zero.

Quizplus · Accepted Answer

Along a linear demand curve, price elasticity of demand varies at different points. It is more elastic to the northwest (upper-left) because there is greater price sensitivity and consumers are more responsive to changes in price. It is less elastic to the southeast (lower-right) because there is less price sensitivity and consumers are less responsive to changes in price. Therefore, option B is the correct answer.

Exhibit 4-A -Refer to Exhibit 4-A.Along a Linear Demand Curve, Price Elasticity