The demand for bus rides is a downward- sloping straight- line demand curve. The price elasticity of demand for bus rides
A) decreases as the price of a bus ride falls.
B) is the same no matter what the price of a bus ride.
C) decreases as the price of a bus ride rises.
D) increases as the price of a bus ride falls.

Question

Quizplus · Accepted Answer

As the price of a bus ride falls, the quantity demanded increases, moving down along the demand curve. On a linear demand curve, the price elasticity of demand decreases as you move down the curve because the percentage change in quantity demanded becomes smaller relative to the percentage change in price.

The Demand for Bus Rides Is a Downward- Sloping Straight-