Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P x . Assume that P = $8, I = 200, and P x = $10.
-As the price is raised along a straight-line demand curve, the demand curve becomes more elastic.

Question

Quizplus · Accepted Answer

As the price increases along a linear demand curve, the percentage change in quantity demanded becomes larger relative to the percentage change in price, making the demand more elastic.

Scenario 5.1 The Demand for Noodles Is Given by the Following Equation