along a linear demand curve, as price falls a) the price elasticity of demand is constant, but the slope of demand falls. b) the price elasticity of demand approaches zero, but the slope is constant. c) the price elasticity of demand moves away from zero. d) the price elasticity is the same as the slope of the demand curve.

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13-09-2022
Business

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along a linear demand curve, as price falls a) the price elasticity of demand is constant, but the slope of demand falls. b) the price elasticity of demand approaches zero, but the slope is constant. c) the price elasticity of demand moves away from zero. d) the price elasticity is the same as the slope of the demand curve.

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rafikiedu08 rafikiedu08 · Answer 1 · 2022-09-17T06:23:42-04:00

The Slope always remains constant, just like in the linear demand curve. This indicates that the price elasticity of demand has varied depending on the viewpoint. However, as prices fall, the price elasticity of demand decreases and eventually approaches zero, with the amount required remaining constant. This demonstrates that the price elasticity of demand is inelastic and is decreasing. When a specific amount of an item is used, the price does not raise demand. For instance, salt, sugar, etc.

According to the law of demand, the quantity required will vary in the opposite direction in response to a change in price. How much, though, will it alter? For instance, it would seem logical to anticipate that a 10% increase in the cost of a doctor's visit would result in a different percentage change in quantity requested than a 10% increase in the cost of a Ford Mustang.

But how big of a difference is there?

We use the idea of elasticity to demonstrate how sensitive quantity required is to a change in price. The percentage change in quantity requested of a certain item or service divided by the percentage change in price is known as the price elasticity of demand for that good or service, or eD. the cost of that commodity or service, with all other factors being the same.

Does the demand elasticity follow a linear demand curve?

We shall show that elasticity decreases with price along a linear demand curve, which is a straight line with a constant slope. In actuality, as we proceed down a straight line demand curve with a downward slope, the elasticity goes numerically from infinity to zero.

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