If the demand curve is a downward sloping straight line, the price elasticity of demand always
A) increases as the demand curve shifts rightward.
B) increases as the demand curve shifts leftward.
C) increases with movements upward along the demand curve.
D) decreases with movements upward along the demand curve.

Question

Quizplus · Accepted Answer

The price elasticity of demand increases with movements upward along a downward sloping straight line demand curve because the percentage change in quantity demanded becomes larger relative to the percentage change in price as price increases.

If the Demand Curve Is a Downward Sloping Straight Line