Question

The demand for bus rides is a downward-sloping straight line demand curve. The price elasticity of demand for bus rides ________.(A) decreases as the price of a bus ride(B) rises is the same no matter what the price of a bus ride(C) increases as the price of a bus ride falls(D) decreases as the price of a bus ride falls

Answer 1

The price elasticity of demand for bus rides decreases as price rises due to the law of demand, indicating a less sensitive response in quantity demanded to price changes at higher prices. Option A.

Step-by-step explanation:

The price elasticity of demand for bus rides changes as the price of bus rides changes. The demand curve for bus rides is a downward-sloping straight line, explaining the law of demand, which says there is an inverse relationship between price and quantity demanded.

Taking this into account, as the price of a bus ride rises, the price elasticity of demand decreases, meaning that a one percent change in price will result in a less than one percent change in the quantity demanded, reflecting an inelastic response in demand to price changes at higher price levels.

Conversely, as the price of a bus ride falls, the price elasticity of demand increases, indicating a more sensitive change in quantity demanded for a price change, reflecting a more elastic demand at lower price levels.

So Option A.

Answer 2

The price elasticity of demand for bus rides decreases as the price of a bus ride falls (D)

Step-by-step explanation:

Price elasticity of interest is a financial proportion of the adjustment in the amount requested or obtained of an item in connection to its value change. When the amount required of an object displays a considerable difference because of changes in its value, it is named versatile; that is, the amount extended a long way from its earlier point. On the off chance that the amount obtained has a little change because of its value, it is named inelastic; or the amount did not extend much from its earlier point.