Along a straight-line demand curve, why does the price elasticity of demand grow steadily smaller as we move from left to right?
As we move from left to right, the quantity keeps getting larger, so that a given numerical change in quantity becomes an ever-smaller percentage change. But, simultaneously, the price keeps going lower, so that a given numerical change in price becomes an ever-larger percentage change. So, as one moves from left to right along the demand curve, the numerator of the elasticity fraction keeps falling and the denominator keeps growing larger; thus the fraction that is the elasticity formula keeps declining.
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A) Ireland B) Spain C) Portugal D) Italy
In order to simplify a complex situation, economic models often treat constraints as unalterable
Indicate whether the statement is true or false