Moving upward along a downward sloping straight-line demand curve, as the price of the product goes up
A) the price elasticity of demand does not change.
B) the price elasticity of demand goes from being inelastic to being elastic.
C) the price elasticity of demand goes from being elastic to being inelastic.
D) the price elasticity of demand goes from negative to positive.

Question

Quizplus · Accepted Answer

Moving upward along a downward sloping straight-line demand curve means that we are increasing the price of the product. As the price increases, the quantity demanded decreases. The price elasticity of demand measures the responsiveness of quantity demanded to changes in price.

When we start at a low price, the demand is generally elastic (i.e., price elastic). This means that a small change in price leads to a relatively larger change in quantity demanded. As we move up the demand curve, the price elasticity of demand decreases, meaning that quantity demanded becomes less responsive to changes in price.

Therefore, as we move upward along a downward sloping straight-line demand curve, the price elasticity of demand goes from being elastic to being inelastic. So, option C is incorrect. When we move upward along a downward sloping straight-line demand curve, the price elasticity of demand does change, so option A is incorrect. The price elasticity of demand is always negative (as price and quantity demanded move in opposite directions), so option D is incorrect. Thus, the correct answer is B.

Moving Upward Along a Downward Sloping Straight-Line Demand Curve, as the Price