Figure 4-3
-Refer to Figure 4-3.Which of the following statements is true about the price elasticity of demand?
A) The elasticity coefficient is constant along the demand curve.
B) The elastic portion of a straight-line downward-sloping demand curve corresponds to the segment above the midpoint.
C) The inelastic portion of the demand curve corresponds to the segment above the midpoint.
D) At the midpoint of the demand curve, the elasticity coefficient is zero.

Question

Figure 4-3 
-Refer to Figure 4-3.Which of the following statements is true about the price elasticity of demand?
A) The elasticity coefficient is constant along the demand curve. 
B) The elastic portion of a straight-line downward-sloping demand curve corresponds to the segment above the midpoint. 
C) The inelastic portion of the demand curve corresponds to the segment above the midpoint. 
D) At the midpoint of the demand curve, the elasticity coefficient is zero.

Quizplus · Accepted Answer

The elastic portion of a straight-line downward-sloping demand curve corresponds to the segment above the midpoint. In other words, demand is more responsive to changes in price above the midpoint, resulting in a higher elasticity coefficient. The inelastic portion of the demand curve corresponds to the segment below the midpoint, meaning demand is less responsive to changes in price, resulting in a lower elasticity coefficient. The elasticity coefficient is not constant along the demand curve, and it is not zero at the midpoint.

Figure 4-3 -Refer to Figure 4-3.Which of the Following Statements Is True