At the midpoint of a linear, downward-sloping demand curve, the price elasticity of demand is
A) less than one but greater than zero.
B) zero.
C) infinite.
D) greater than one.
E) equal to one.

Question

Quizplus · Accepted Answer

At the midpoint of a linear demand curve, the price elasticity of demand is equal to one. This means that a 1% increase in price will result in a 1% decrease in quantity demanded. This is known as unit elasticity.

At the Midpoint of a Linear, Downward-Sloping Demand Curve, the Price