Moving downward on a downward sloping linear demand curve, the absolute value of the price elasticity of demand
A) is constant.
B) increases continuously.
C) decreases continuously.
D) may either increase or decrease.

Question

Quizplus · Accepted Answer

On a downward sloping linear demand curve, the price elasticity of demand decreases as we move down the curve, because as the price decreases, the percentage change in quantity demanded becomes smaller and smaller, resulting in a smaller price elasticity of demand. Therefore, the absolute value of the price elasticity of demand decreases continuously.

Moving Downward on a Downward Sloping Linear Demand Curve, the Absolute