Read this chapter to learn about the concept of elasticity. Be sure to read Sections 5.1-5.4 following the introduction. The Price Elasticity of DemandPrice Elasticities Along a Linear Demand CurveWhat happens to the price elasticity of demand when we travel along the demand curve? The answer depends on the nature of the demand curve itself. On a linear demand curve, such as the one in Figure 5.2 "Price Elasticities of Demand for a Linear Demand Curve", elasticity becomes smaller (in absolute value) as we travel downward and to the right. Figure 5.2 Price Elasticities of Demand for a Linear Demand Curve  The price elasticity of demand varies between different pairs of points along a linear demand curve. The lower the price and the greater the quantity demanded, the lower the absolute value of the price elasticity of demand. Figure 5.2 "Price Elasticities of Demand for a Linear Demand Curve" shows the same demand curve we saw in Figure 5.1 "Responsiveness and Demand". We have already calculated the price elasticity of demand between points A and B; it equals −3.00. Notice, however, that when we use the same method to compute the price elasticity of demand between other sets of points, our answer varies. For each of the pairs of points shown, the changes in price and quantity demanded are the same (a $0.10 decrease in price and 20,000 additional rides per day, respectively). But at the high prices and low quantities on the upper part of the demand curve, the percentage change in quantity is relatively large, whereas the percentage change in price is relatively small. The absolute value of the price elasticity of demand is thus relatively large. As we move down the demand curve, equal changes in quantity represent smaller and smaller percentage changes, whereas equal changes in price represent larger and larger percentage changes, and the absolute value of the elasticity measure declines. Between points C and D, for example, the price elasticity of demand is −1.00, and between points E and F the price elasticity of demand is −0.33. On a linear demand curve, the price elasticity of demand varies depending on the interval over which we are measuring it. For any linear demand curve, the absolute value of the price elasticity of demand will fall as we move down and to the right along the curve. When a demand curve is linear and downward sloping?The downward-sloping demand curve that is linear means that the demand elasticity will vary and can be elastic at some points, whereas it can be inelastic at some other points. At the upper part of the demand curve, the demand is price elastic, and at the lower part of the demand curve, the demand is price inelastic.
How long a linear downward sloping demand curve the price elasticity of demand will be?Under point method, a straight line downward sloping demand curve implies that, as price falls, the elasticity of demand decreases from infinity to zero.
Which is true about the elasticity of demand on a linear downward sloping demand curve?With a downward-sloping demand curve, price and quantity demanded move in opposite directions, so the price elasticity of demand is always negative. A positive percentage change in price implies a negative percentage change in quantity demanded, and vice versa.
When a demand is in downward sloping straight line what would be elasticity of demand on middle of demand curve?Because demand curves slope downward, the elasticity of demand is always negative. If the elasticity of demand is between 0 and 1, then it is inelastic or unresponsive, since the percentage change in price generates a smaller percentage change in the quantity demanded.
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If the demand curve is a linear downward-sloping curve, the price elasticity of demand:
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