Along a linear (straight-line)downward-sloping demand curve,demand is unit elastic at
A) the highest price.
B) the lowest price.
C) the midpoint.
D) all points on the linear demand curve.
E) None of the above because linear demand curves are never unit elastic.

Question

Quizplus · Accepted Answer

Along a linear demand curve, demand is unit elastic at the midpoint. This is because at the midpoint, the percentage change in quantity demanded is equal to the percentage change in price, resulting in an elasticity of 1. At any other point on the linear demand curve, demand will be either elastic (e > 1) or inelastic (e < 1).

Along a Linear (Straight-Line)downward-Sloping Demand Curve,demand Is Unit Elastic at