As one moves down a straight-line, down-sloping demand curve, price elasticity will:
A) change from elastic, to unit elastic, then to inelastic.
B) remain the same between any two points.
C) change from inelastic, to elastic, then to unit elastic.
D) change from unit elastic, to elastic, then to inelastic.

Question

Quizplus · Accepted Answer

The price elasticity of demand measures how much the quantity demanded of a good responds to a change in its price. On a straight-line demand curve, as one moves down the curve from the top left to the bottom right, the demand changes from elastic (where a small change in price leads to a large change in quantity demanded), to unit elastic (where the percentage change in quantity demanded equals the percentage change in price), and finally to inelastic (where a change in price leads to a smaller change in quantity demanded). This reflects the decreasing sensitivity of quantity demanded to price changes as one moves down the demand curve.

As One Moves Down a Straight-Line, Down-Sloping Demand Curve, Price