Price elasticity is unit elastic at the midpoint of a linear, downward-sloping demand curve.

a.True
b.False

a. true

a.True

To understand why price elasticity is unit elastic at the midpoint of a linear, downward-sloping demand curve, we need to first understand what price elasticity of demand (PED) is. Price elasticity of demand measures the responsiveness of quantity demanded to a change in price.

In the case of a linear, downward-sloping demand curve, the PED varies along the curve. At different points on the curve, the PED can be elastic (greater than 1), inelastic (less than 1), or unit elastic (equal to 1).

When the PED is unit elastic, it means that the percentage change in quantity demanded is equal to the percentage change in price. In other words, a 1% increase in price will result in a 1% decrease in quantity demanded, and a 1% decrease in price will result in a 1% increase in quantity demanded.

At the midpoint of a linear, downward-sloping demand curve, the demand is most responsive to price changes. Any change in price will lead to an equal percentage change in quantity demanded, resulting in a unit elastic demand. Therefore, the statement that price elasticity is unit elastic at the midpoint of a linear, downward-sloping demand curve is true.