Question

if demand is linear (a straight line), then price elasticity of demand is
a. elastic in the upper portion and inelastic in the lower portion.
b. elastic throughout.
c. inelastic throughout.
d. inelastic in the upper portion and elastic in the lower portion.
e. constant along the demand curve.

Explanation:

For a linear (straight-line) demand curve, price elasticity of demand changes along the curve. The upper portion (higher prices, lower quantity) has a price elasticity of demand with an absolute value greater than 1 (elastic), meaning quantity demanded is highly responsive to price changes. The lower portion (lower prices, higher quantity) has an absolute value less than 1 (inelastic), meaning quantity demanded is less responsive to price changes.

Answer:

a. elastic in the upper portion and inelastic in the lower portion.