Question

Moving downward along a linear ​(straightminus−​line)

downwardminus−sloping

demand​ curve, the

A.

total revenue never changes.

B.

quantity demanded decreases.

C.

demand becomes more elastic.

D.

price elasticity of demand does not change.

E.

demand becomes less elastic.

Answer 1

The correct answer is (E) demand becomes less elastic

In a demand curve Price(P) is on y axis and quantity(Q) is on x axis and when we move downward price decreases and quantity demand increases Hence option (B) is incorrect.

When we move down the demand curve Price and quantity will change and Hence TR is not constant always when we move down the demand curve Hence option (A) is incorrect

Price elasticity of demand = (dQ/dP)(P/Q), In a linear demand curve dQ/dP is constant but when we move down the demand curve Q increases and P decreases. Hence (dQ/dP)(P/Q) will decreases and not constant. Hence option (c) and (D) are incorrect

Hence demand becomes less elastic when we move down the demand curve.

Hence, the correct answer is (E) demand becomes less elastic