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    Arc elasticity of demand measures the price elasticity between two points on a demand curve. It uses the ratio of the percentage change in quantity to the percentage change in price along the arc between the two points, rather than along a straight line. The arc elasticity is calculated using the formula that takes the ratio of the percentage change in quantity to the percentage change in price between the two points.

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    Arc elasticity of demand measures the price elasticity between two points on a demand curve. It uses the ratio of the percentage change in quantity to the percentage change in price along the arc between the two points, rather than along a straight line. The arc elasticity is calculated using the formula that takes the ratio of the percentage change in quantity to the percentage change in price between the two points.

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    7 views3 pages

    Bus Eco

    Uploaded by

    dsdfdf
    Arc elasticity of demand measures the price elasticity between two points on a demand curve. It uses the ratio of the percentage change in quantity to the percentage change in price along the arc between the two points, rather than along a straight line. The arc elasticity is calculated using the formula that takes the ratio of the percentage change in quantity to the percentage change in price between the two points.

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    of 3

    ARCF

    ARC ELASTICITY OF DEMAND:

    • So lets start from the basics. An ac is a part of


    circumference of a circle.
    • To measure the price elasticity between two or • ARC ELASTICITY
    more points is known as arc elasticity of
    demand.
    • In ar PRICE
    D

    A
    P1
    ARC

    B
    P2
    D

    Q1 Q2 QUANTITY

    Fig 1.0

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