A linear demand curve has:
A)a constant price elasticity of demand.
B)a price elasticity of demand equal to one at all prices.
C)a calculated price elasticity of demand that is positive.
D)both elastic and inelastic price elasticities of demand.

Question

Quizplus · Accepted Answer

A linear demand curve does not have a constant price elasticity of demand; instead, its elasticity varies along the curve. At higher prices and lower quantities, the demand is elastic (elasticity greater than 1), and at lower prices and higher quantities, the demand is inelastic (elasticity less than 1). This variation means that a linear demand curve exhibits both elastic and inelastic price elasticities of demand at different points.

A Linear Demand Curve Has