For a linear demand curve, elasticity is greater in the higher price range (8-10) than in the lower price range (2-4).

For a linear demand curve, elasticity is greater in the higher price range (8-10) than in the lower price range (2-4).

• A. The same in both ranges.
• B. Greater in the lower price range.
• C. Greater in the higher price range.
• D. Greater in the higher price range.

Answer: (D)

Elasticity changes along a linear demand curve because its formula at a point is E = (dQ/dP) × (P/Q). The slope dQ/dP is constant for a straight line, so elasticity depends on the ratio P to Q. When price is high, quantity is low, so P/Q is large and the elasticity (in absolute value) is large. When price is low, quantity is high, so P/Q is small and elasticity is small. A concrete check helps: with a line like P = 12 − Q, at high prices (P around 9–10) Q is around 3–2, giving elasticity about 3–5 in absolute value; at low prices (P around 3–4) Q is around 9–8, giving elasticity about 0.3–0.4. So elasticity is greater in the higher price range, making that choice the best answer.

Elasticity changes along a linear demand curve because its formula at a point is E = (dQ/dP) × (P/Q). The slope dQ/dP is constant for a straight line, so elasticity depends on the ratio P to Q. When price is high, quantity is low, so P/Q is large and the elasticity (in absolute value) is large. When price is low, quantity is high, so P/Q is small and elasticity is small. A concrete check helps: with a line like P = 12 − Q, at high prices (P around 9–10) Q is around 3–2, giving elasticity about 3–5 in absolute value; at low prices (P around 3–4) Q is around 9–8, giving elasticity about 0.3–0.4. So elasticity is greater in the higher price range, making that choice the best answer.