Elasticity - three graphical examples

Demand curve parameters

a b 1/a =
-0.5 4 -2
linear case here non-linear case here
Q P Q P ln Q ln P DlnQ/DlnP Natural log of demand curve

0 4 0 #NUM! omit omit elasticity

1 3.5 1 4 0 1.386294

log of pricelnP
2 3 2 2.828427 0.693147 1.039721 -2 1.5

3 2.5 3 2.309401 1.098612 0.836988 -2 1

4 2 4 2 1.386294 0.693147 -2 0.5

5 1.5 5 1.788854 1.609438 0.581575 -2 0

0 0.5 1 1.5 2 2.5
6 1 6 1.632993 1.791759 0.490415 -2
7 0.5 7 1.511858 1.94591 0.413339 -2 log of quantity, lnQ
8 0 8 1.414214 2.079442 0.346574 -2

Demand curve

4.5

4 Price as the dependent

3.5 variable – linear case:
3 P  aQ  b
2.5 a0
Price

P
2
P
1.5 a
Q
1

Q P 1 P
0.5
E 
0 P Q a Q
0 1 2 3 4 5 6 7 8 9
Quantity

Non-linear demand curve Price as the dependent

variable – non-linear case:
5 P  bQ a
4  ln P  ln b  a ln Q
Price

3
2 a0
1  ln P
0 a
0 1 2 3 4 5 6 7 8 9
 ln Q
 ln Q 1
Quantity E 
 ln P a
 Natural log of demand curve
log of pricelnP

1.5
1
0.5
0
0 0.5 1 1.5 2 2.5
log of quantity, lnQ

pendent
ar case:

pendent
linear case: