Figure 4.4
-Refer to Figure 4.4.Which of the following statements is true about the price elasticity of demand?
A)The elasticity coefficient is constant along the demand curve.
B)The elastic portion of a straight-line downward-sloping demand curve corresponds to the segment above the midpoint.
C)The inelastic portion of the demand curve corresponds to the segment above the midpoint.
D)At the midpoint of the demand curve, the elasticity coefficient is zero.

Question

Figure 4.4 
-Refer to Figure 4.4.Which of the following statements is true about the price elasticity of demand?
A)The elasticity coefficient is constant along the demand curve. 
B)The elastic portion of a straight-line downward-sloping demand curve corresponds to the segment above the midpoint. 
C)The inelastic portion of the demand curve corresponds to the segment above the midpoint. 
D)At the midpoint of the demand curve, the elasticity coefficient is zero.

Quizplus · Accepted Answer

The elastic portion of a straight-line downward-sloping demand curve corresponds to the segment above the midpoint. This is because in this segment, a small change in price causes a relatively large change in quantity demanded, indicating high price elasticity. In contrast, the inelastic portion of the demand curve corresponds to the segment below the midpoint, where a change in price causes a proportionally smaller change in quantity demanded, indicating low price elasticity. The elasticity coefficient is not constant along the demand curve, and it is not zero at the midpoint.

Figure 4.4 -Refer to Figure 4.4.Which of the Following Statements Is True