Explain why the Elasticity value gets smaller as you move down the demand curve. a.As we move down the demand curve, equal changes in quantity represent smaller and smaller percentage changes, whereas equal changes in price represent smaller and snmaller percentage changes, and the absolute value of the elasticity measure declines. b.As we move down the demand curve, equal changes in quantity represent larger and larger percentage changes, whereas equal changes in price represent larger and larger percentage changes, and the absolute value of the elasticity measure declines. c.As we move down the demand curve, equal changes in quantity represent smaller and smaller percentage changes, whereas equal changes in price represent larger and larger percentage changes, and the absolute value of the elasticity measure declines. d.As we move up the demand curve, equal changes in quantity represent smaller and smaller percentage changes, whereas equal changes in price represent larger and larger percentage changes, and the absolute value of the elasticity measure inclines. e.As we move up the demand curve, equal changes in quantity represent smaller and smaller percentage changes, whereas equal changes in price represent larger and larger percentage changes, and the absolute value of the elasticity measure decline.

Elasticity of demand measures the degree of responsiveness, which means that how much quantity demanded of any good will change given the change in price level. Demand curve shows the inverse relationship between quantity demanded and price of the commodity. As we move down the demand curve, the value of Elasticity gets smaller because equal changes in quantity represents smaller and smaller percentage change whereas equal changes in price represents larger and larger percentage changes, and the absolute value of elasticity measure decline. Hence option b is correct.

Answered: Explain why the Elasticity value gets…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Explain why the Elasticity value gets smaller as you move down the demand curve.

	a.	As we move down the demand curve, equal changes in quantity represent smaller and smaller percentage changes, whereas equal changes in price represent smaller and snmaller percentage changes, and the absolute value of the elasticity measure declines.
	b.	As we move down the demand curve, equal changes in quantity represent larger and larger percentage changes, whereas equal changes in price represent larger and larger percentage changes, and the absolute value of the elasticity measure declines.
	c.	As we move down the demand curve, equal changes in quantity represent smaller and smaller percentage changes, whereas equal changes in price represent larger and larger percentage changes, and the absolute value of the elasticity measure declines.
	d.	As we move up the demand curve, equal changes in quantity represent smaller and smaller percentage changes, whereas equal changes in price represent larger and larger percentage changes, and the absolute value of the elasticity measure inclines.
	e.	As we move up the demand curve, equal changes in quantity represent smaller and smaller percentage changes, whereas equal changes in price represent larger and larger percentage changes, and the absolute value of the elasticity measure decline.

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