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Elasticity on Demand

Elasticity on Demand

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Published by roshaun007
Elasricity of demand
Elasricity of demand

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Published by: roshaun007 on Sep 13, 2010
Copyright:Attribution Non-commercial


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We may have some applications of the above method of measuring elasticity on demand curves of differentshapes:
 Y  X O SMQ PriceQuantity 
(a) Two straight line demand curves which are neither parallel nor intersecting. This method of measuringelasticity helps to compare the elasticity of demandcurves, and shows the flexibility of the notion thatelasticity depends upon the slope of a curve. In thefigure we have taken two straight line demandcurves NM and NS. If we draw a dotted line passingthrough these curves and touching the Y-axis atpoint T, the elasticity at point Q on the NM curveaccording to the point formula is:
being sides of right angle ¨ONMSimilarly, elasticity at point V on the NS curve isThus, elasticity is equal on both points Q and V.

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