Question

As you move up along the demand curve, the price elasticity of demand: Select one: a....

As you move up along the demand curve, the price elasticity of demand:

Select one:

a. Becomes more inelastic

b. Is unchanged

c. Becomes infinite

d. Becomes more elastic

e. Falls to zero

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Answer #1

The demand curve is the graphic representation of the negative relationship between price and quantity demanded .The price elasticity of demand varies across the demand curve. The upper portion of the demand curve is more elastic and the lower portion is inelastic, this tells us that at higher prices a decrease in the price will significantly increase the total revenue and vice versa. At the bottom part of the demand curve the demand is inelastic that is , a decrease in the price would not increase the total revenue.

Ans: d). Becomes more elastic.

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