A straight line demand curve has a different elasticity of demand at different points along the curve.

Question

Quizplus · Accepted Answer

Along a straight line demand curve, the elasticity of demand varies at different points because the slope of the curve changes, which affects the responsiveness of demand to changes in price. At the top of the demand curve (where price is high), demand tends to be more price elastic, meaning small changes in price result in larger changes in quantity demanded. At the bottom of the demand curve (where price is low), demand tends to be more price inelastic, meaning large changes in price result in small changes in quantity demanded. The midpoint of the demand curve is where elasticity is unitary, meaning changes in price result in equal proportionate changes in quantity demanded.

A Straight Line Demand Curve Has a Different Elasticity of Demand