For a straight-line downward-sloping demand curve, price elasticity of demand a. increases as we move down...

For a straight-line downward-sloping demand curve, price elasticity of demand

a.	increases as we move down along the demand curve from higher to lower prices.
	b.	decreases as we move down along the demand curve from higher to lower prices.
	c.	remains constant along the entire demand curve.
	d.	a or b depending on the actual slope of the demand curve

Solutions

Expert Solution

Answer: b. decreases as we move down along the demand curve from higher to lower prices.

Explanation: If the demand curve is a downward sloping straight line, then the demand will be more elastic at higher prices than at lower prices. As we move along a downward sloping straight line demand curve from left to right, price elasticity of demand goes on falling.

Rahul Sunny answered 1 year ago

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