Changing PED Along a Demand Curve (HL Only)
Elasticities of Demand
AO2·AO4·Diagram required·HL
Syllabus requirement
PED varies along a straight-line demand curve; HL students must understand how responsiveness changes at different points.
Assessment objectives
AO2 Application and AnalysisAO4 Use of Appropriate Skills
Required diagram: Diagram of a straight-line demand curve showing elastic, unitary, and inelastic segments based on midpoint.
Higher LevelThis topic is assessed at HL.
Summary
This topic explains how price elasticity of demand (PED) can vary along a straight-line demand curve, showing segments that are price elastic, unitary elastic, and price inelastic. It covers the theoretical extremes (perfectly elastic and perfectly inelastic), the meaning of unitary elasticity, and the implications for quantity demanded and total spending. Understanding these variations helps predict how quantity demanded responds to price changes and how revenue may change.
