For a straight-line downward-sloping demand curve, price elasticity of demand
A)increases as we move down along the demand curve from higher to lower prices.
B)decreases as we move down along the demand curve from higher to lower prices.
C)remains constant along the entire demand curve.
D)decreases as we move up along the demand curve from lower to higher prices.

Question

Quizplus · Accepted Answer

For a downward-sloping demand curve, as price decreases, quantity demanded increases. As a result, the percentage change in quantity demanded is higher at lower prices than at higher prices. Therefore, the price elasticity of demand decreases as we move down along the demand curve from higher to lower prices.

For a Straight-Line Downward-Sloping Demand Curve, Price Elasticity of Demand