Table of contents

0. Basic Principles of Economics1h 5m
1. Reading and Understanding Graphs59m
2. Introductory Economic Models1h 10m
3. The Market Forces of Supply and Demand2h 26m
4. Elasticity2h 26m
5. Consumer and Producer Surplus; Price Ceilings and Floors3h 45m
6. Introduction to Taxes and Subsidies1h 46m
7. Externalities1h 12m
8. The Types of Goods1h 13m
9. International Trade1h 16m
10. The Costs of Production2h 35m
11. Perfect Competition2h 23m
12. Monopoly2h 13m
13. Monopolistic Competition1h 9m
14. Oligopoly1h 26m
15. Markets for the Factors of Production1h 26m
16. Income Inequality and Poverty35m
17. Asymmetric Information, Voting, and Public Choice39m
18. Consumer Choice and Behavioral Economics1h 16m

4. Elasticity

Elasticity Summary

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Multiple Choice

A linear, downward-sloping demand curve is

Inelastic

Unit Elastic

Elastic

Inelastic at some points, and elastic at others

Next problem

Verified step by step guidance

Understand the concept of elasticity: Elasticity measures how much the quantity demanded of a good responds to a change in price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price.

Recognize the characteristics of a linear demand curve: A linear demand curve is a straight line, which means the slope is constant. However, elasticity varies along the curve.

Identify the relationship between elasticity and the demand curve: At higher prices and lower quantities, the demand curve tends to be elastic because consumers are more responsive to price changes. At lower prices and higher quantities, the demand curve tends to be inelastic because consumers are less responsive to price changes.

Determine the point of unit elasticity: The point where the demand curve transitions from elastic to inelastic is where the elasticity is equal to one, known as unit elasticity. This typically occurs at the midpoint of a linear demand curve.

Conclude that a linear, downward-sloping demand curve is elastic at higher prices, unit elastic at the midpoint, and inelastic at lower prices.