Which of the following is correct? i. All linear demand curves have a constant slope and a constant price elasticity of demand.
Ii) The price elasticity of demand changes while moving along a downward-sloping linear demand curve.
Iii) The magnitude of the slope of all linear demand curves is equal to the price elasticity of demand.
A) i only
B) i, ii and iii
C) iii only
D) i and ii
E) ii only

Question

Quizplus · Accepted Answer

The correct statement is ii) The price elasticity of demand changes while moving along a downward-sloping linear demand curve. This is because price elasticity of demand measures the responsiveness of quantity demanded to a change in price, and this responsiveness varies at different points along a linear demand curve due to the calculation involving both price and quantity, which change along the curve.

Which of the Following Is Correct? I