Refer to the information provided in Figure 5.4 below to answer the question(s) that follow. Figure 5.4
-Refer to Figure 5.4. Along the given demand curve, which of the following is true?
A) Demand is less elastic along the segment AB than the segment EF.
B) Demand is less elastic along the segment EF than the segment AB.
C) Since the demand curve is linear, the price elasticity of demand between each of the points is the same.
D) All of the above are true.

Question

Refer to the information provided in Figure 5.4 below to answer the question(s) that follow.  Figure 5.4
-Refer to Figure 5.4. Along the given demand curve, which of the following is true?
A) Demand is less elastic along the segment AB than the segment EF. 
B) Demand is less elastic along the segment EF than the segment AB. 
C) Since the demand curve is linear, the price elasticity of demand between each of the points is the same. 
D) All of the above are true.

Quizplus · Accepted Answer

Demand elasticity varies along a linear demand curve. It is more elastic at higher prices and lower quantities (like segment EF) and less elastic at lower prices and higher quantities (like segment AB). This is because the percentage change in quantity demanded is larger at higher prices for a given absolute change in price, making demand more elastic at the upper end of the demand curve.

Refer to the Information Provided in Figure 5