Exhibit 6-2 Refer to Exhibit 6-2.Along a linear demand curve,price elasticity of demand is:
A) constant.
B) more elastic to the northwest than to the southeast.
C) less elastic to the northwest than to the southeast.
D) always equal to one.
E) always equal to zero.

Question

Exhibit 6-2  Refer to Exhibit 6-2.Along a linear demand curve,price elasticity of demand is:
A) constant. 
B) more elastic to the northwest than to the southeast. 
C) less elastic to the northwest than to the southeast. 
D) always equal to one. 
E) always equal to zero.

Quizplus · Accepted Answer

Along a linear demand curve, the price elasticity of demand varies along the curve. The demand is more elastic (i.e., more responsive to price change) towards the northwest of the demand curve and less elastic (i.e., less responsive to price change) towards the southeast of the demand curve. Therefore, option B is correct. The option A, C, D and E are incorrect.