Which of the following statements about the price elasticity of demand along a downward-sloping linear demand curve is true?
A)It is inelastic at high prices and elastic at low prices.
B)It is unit elastic throughout the demand curve.
C)It is elastic at high prices and inelastic at low prices.
D)It is perfectly elastic at very high prices and perfectly inelastic at very low prices.

Question

Quizplus · Accepted Answer

The price elasticity of demand is elastic at high prices because a small decrease in price would result in a relatively large increase in quantity demanded. At low prices, the price elasticity of demand is inelastic because a small decrease in price would result in a relatively small increase in quantity demanded. Along a linear demand curve, the elasticity of demand varies at different points. It is neither unit elastic nor perfectly elastic or inelastic along the entire curve.

Which of the Following Statements About the Price Elasticity of Demand