On a linear demand curve, the price range from 8 to 6 is elastic; in the range 4 to 2 it is inelastic.

On a linear demand curve, the price range from 8 to 6 is elastic; in the range 4 to 2 it is inelastic.

• A. elastic; inelastic
• B. inelastic; inelastic
• C. elastic; elastic
• D. inelastic; elastic

Answer: (A)

On a linear demand curve, elasticity is not constant—it's higher up near the top (higher price, lower quantity) and lower down near the bottom (lower price, higher quantity). At higher prices, a proportionate drop in price tends to bring a larger percent increase in quantity, so elasticity exceeds 1 (elastic). As you move down the curve to lower prices, the same absolute change in price yields a smaller percent change in quantity, so elasticity falls below 1 (inelastic). For the price range from 8 to 6, you’re in the higher-price region, where the quantity responds more than proportionally to the price drop, giving elastic demand. In the range from 4 to 2, you’re further down the curve, where the quantity rises by a smaller proportion relative to the price drop, giving inelastic demand. A quick illustration with a simple linear demand like Q = 12 − P makes this concrete: at P = 8, Q = 4; at P = 6, Q = 6, giving a point elasticity around −2 (elastic). At P = 4, Q = 8; at P = 2, Q = 10, giving a point elasticity around −0.5 (inelastic).

On a linear demand curve, elasticity is not constant—it's higher up near the top (higher price, lower quantity) and lower down near the bottom (lower price, higher quantity). At higher prices, a proportionate drop in price tends to bring a larger percent increase in quantity, so elasticity exceeds 1 (elastic). As you move down the curve to lower prices, the same absolute change in price yields a smaller percent change in quantity, so elasticity falls below 1 (inelastic).

For the price range from 8 to 6, you’re in the higher-price region, where the quantity responds more than proportionally to the price drop, giving elastic demand. In the range from 4 to 2, you’re further down the curve, where the quantity rises by a smaller proportion relative to the price drop, giving inelastic demand.

A quick illustration with a simple linear demand like Q = 12 − P makes this concrete: at P = 8, Q = 4; at P = 6, Q = 6, giving a point elasticity around −2 (elastic). At P = 4, Q = 8; at P = 2, Q = 10, giving a point elasticity around −0.5 (inelastic).