The price elasticity of demand of a straight-line demand curve is
A)elastic in high-price ranges and inelastic in low-price ranges.
B)elastic but does not change at various points on the curve.
C)inelastic but does not change at various points on the curve.
D)1 at all points on the curve.

Question

Quizplus · Accepted Answer

The price elasticity of demand varies along a straight-line demand curve. It is elastic (greater than 1) in high-price ranges because a small quantity change represents a large percentage change when the quantity is small. Conversely, it is inelastic (less than 1) in low-price ranges because a similar quantity change represents a smaller percentage change when the quantity is large.

The Price Elasticity of Demand of a Straight-Line Demand Curve