Along a linear demand curve,
A)both the slope and price elasticity are constant
B)the price elasticity is constant, but the slope varies
C)total revenues are constant
D)the slope is constant, but the price elasticity varies
E)total revenues are negative

Question

Quizplus · Accepted Answer

Along a linear demand curve, the slope is constant, but the price elasticity varies. This is because while the slope of the line remains the same, the percentage change in quantity demanded in response to a price change varies, which affects the price elasticity. As the price increases, the percentage change in quantity demanded also decreases, and vice versa, resulting in a varying price elasticity.

Along a Linear Demand Curve