Exhibit 5-26
-Refer to Exhibit 5-26. As you move down the demand curve from A to B to C to D, which of the following describes what happens to the price elasticity of demand?
A) nothing
B) goes from elastic at A and gets increasingly inelastic as you go to B and C and D
C) goes from perfectly inelastic at A and gets increasingly elastic as you go to B and C and D
D) goes from inelastic at A and gets increasingly elastic as you go to B and C and D
E) goes from inelastic at A and gets increasingly elastic as you go to B but then gets increasingly inelastic as you go to C and D

Question

Exhibit 5-26 
-Refer to Exhibit 5-26. As you move down the demand curve from A to B to C to D, which of the following describes what happens to the price elasticity of demand?
A) nothing 
B) goes from elastic at A and gets increasingly inelastic as you go to B and C and D 
C) goes from perfectly inelastic at A and gets increasingly elastic as you go to B and C and D 
D) goes from inelastic at A and gets increasingly elastic as you go to B and C and D 
E) goes from inelastic at A and gets increasingly elastic as you go to B but then gets increasingly inelastic as you go to C and D

Quizplus · Accepted Answer

As you move down the demand curve from A to D, the quantity demanded increases while the price decreases. This means that consumers become less responsive to changes in price, making the demand curve less elastic and more inelastic. Therefore, the price elasticity of demand goes from inelastic (A) to increasingly elastic (B, C) and finally becomes elastic (D).

Exhibit 5-26 -Refer to Exhibit 5-26. as You Move Down the Demand