On a given linear demand curve, as price increases demand becomes:
A)more elastic.
B)less elastic.
C)more negative.
D)more variable.

Question

Quizplus · Accepted Answer

Consider the formula for the price elasticity of demand: (P/Q)× (1/slope). As price increases (and quantity falls), (P/Q)will rise, and since slope is constant along a linear demand curve, this implies that the elasticity of demand is increasing. That is, demand is becoming more elastic.

On a Given Linear Demand Curve, as Price Increases Demand