“Unit elasticity of demand can be found everywhere along a straight-line demand curve with a slope of -1.” Do you agree or disagree? Explain.

What will be an ideal response?

ANSWER:

Disagree. A vertical demand curve implies perfectly inelastic demand and a horizontal demand curve implies perfectly elastic demand. However, unit elasticity of demand can only be can found in the mid-range of a straight-line demand curve with a slope of -1, but not anywhere else along it.