CHAPTER 5ELASTICITY AND ITS APPLICATION101ELASTICITY AND TOTAL REVENUE ALONGA LINEAR DEMAND CURVEAlthough some demand curves have an elasticity that is the same along the entirecurve, that is not always the case. An example of a demand curve along whichelasticity changes is a straight line, as shown in Figure 5-5. A linear demand curvehas a constant slope. Recall that slope is defined as “rise over run,” which here isthe ratio of the change in price (“rise”) to the change in quantity (“run”). This par-ticular demand curve’s slope is constant because each $1 increase in price causesthe same 2-unit decrease in the quantity demanded.56$74123Quantity122468101
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