2.5.4 (HL)—PED along a straight-line demand curve
- Syllabus
- First assessment 2022
- Objective
- 2.5.4
- Level
- HL
Elasticity varies along a straight-line demand curve
HL onlyElasticity varies along a straight-line demand curve.
Slope is constant on a straight line but elasticity uses relative percentage changes, so it is more elastic near the price intercept and less elastic near the quantity intercept.
Example
The same one-unit price movement can represent a large percentage quantity change at one point and a small one elsewhere.
Read the point on the curve before predicting revenue or responsiveness.
Do not infer constant elasticity from a constant slope.