Asked by Agnes Arzumanyan on Jul 14, 2024
Verified
A straight-line downward-sloping demand curve has a price elasticity of demand which
A) decreases as price decreases.
B) increases as price decreases.
C) is zero at all prices.
D) is unitary at all prices.
Straight-Line
This term often refers to a method of depreciation in accounting where an asset loses value in equal increments over its useful life.
Downward-Sloping Demand Curve
A graphical representation showing the inverse relationship between the price of an item and the quantity demanded.
- Acquire knowledge about the link between demand elasticity and the inclination of the demand curve.
Verified Answer
JM
Jamesia MyrtleJul 20, 2024
Final Answer :
A
Explanation :
The price elasticity of demand decreases as price decreases along a straight-line downward-sloping demand curve because the proportion of total expenditure (price times quantity) represented by a change in price becomes smaller relative to the base from which the change is calculated.
Learning Objectives
- Acquire knowledge about the link between demand elasticity and the inclination of the demand curve.