For a straight-line,downward-sloping demand curve,price elasticity of demand
A) increases as we move down and along the curve from higher to lower prices.
B) decreases as we move down and along the curve from higher to lower prices.
C) remains constant along the entire demand curve.
D) a or b depending on the actual slope of the demand curve

Question

Quizplus · Accepted Answer

For a straight-line, downward-sloping demand curve, the price elasticity of demand decreases as we move down and along the curve from higher to lower prices. This is because the slope of the demand curve becomes less steep as we move down the curve and consumers become less responsive to changes in price. As price decreases, the quantity demanded increases but at a decreasing rate, resulting in a decrease in the price elasticity of demand.

For a Straight-Line,downward-Sloping Demand Curve,price Elasticity of Demand