Principles of Macroeconomics 7th Edition

Published by South-Western College
ISBN 10: 1-28516-591-8
ISBN 13: 978-1-28516-591-2

Chapter 5 - Elasticity and Its Application - Quick Check Multiple Choice - Page 108: 3

Answer

d. inelastic at some points, and elastic at others

Work Step by Step

The slope of a linear demand curve is constant, but its elasticity is not constant at all the points. At points with a low price and high quantity, the demand curve is inelastic. At points with a high price and low quantity, the demand curve is elastic. This is because, at a low price, the quantity demanded of a good tends to change very less with a change in price as the good is still considered affordable below the equilibrium point. The vice versa holds true for a price far above the equilibrium point.
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