Homework Answers
QUESTION : A linear downward sloping demand curve has price elasticity ( in absolute values ) that
SOLUTION : The option ( C ) would be corrected here i.e., Decreases as Price decreases As price elasticity depends on the nature of demand curve .
When prices decreases the quantity demanded increased because it shows the responsiveness change between price and demand . But it lowers the absolute value of price elasticity of demand curve because on the linear demand curve , elasticity of demand will be varied which is depend on the intervals lies on the demand curve .
Hence , absolute value of price elasticity would be decreased as move to downward linear demand curve .
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A linear downward-sloping demand curve has price elasticities (in absolute values) that increase as price decreases....
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