As one moves down a straight-line, down-sloping demand curve, price elasticity (measured by point elasticity method) 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

As one moves down a straight-line demand curve, the price elasticity of demand changes due to the varying proportion of price change to quantity change. At the top of the curve, demand is elastic (a small change in price leads to a large change in quantity demanded), at the midpoint, it is unit elastic (percentage change in price equals percentage change in quantity demanded), and towards the bottom, it becomes inelastic (a large change in price leads to a small change in quantity demanded).

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