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What is the relation between slope of demand curve and elasticity of demand curve?
Wiki User
∙ 15y ago
They are both used to interpret the demand curve. The slope is just the slope, rise or run, ΔY/ΔX. Elasticity is the percentage change in one variable resulting from a percentage change in another variable. Thus, the price elasticity of demand is the percentage change in quantity demanded of a good resulting from a percent change in its price. (P/Q)( ΔQ/ ΔP) This implies that the elasticity is not constant and the elasticity changes along the curve; elasticity goes from 0 (when price is 0) to infinity (when price is very high). Elasticity is a more useful tool for data analysis because it eliminates units and thus the data is easier to interpret. Elasticity is also useful when large numbers are an obstacle in interpreting data like with wage. It is also useful when the taking the log with a set of data preserves the integrity of the data, since elasticity is the slope of the log of the data points.
Wiki User
∙ 15y ago
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What is difference between slope and the calculation of elasticity for a linear demand curve?
Along a linear demand curve elasticity varies from point to point of the demand curve with respect to different price, but slope is constant
Is the price elasticity constant along the demand curve?
Price elasticity of demand is equal to the instantaneous slope of the demand curve, or the slope of the tangent line at any point on the demand curve. So if the demand curve is represented by a straight downward sloping line, then yes, price elasticity of demand is equal to the slope of the demand curve. Otherwise, the slope at any point on the curve is changing, and you can find the it by taking the derivative of the demand curve function, which will find the Price elasticity of demand at any single point. Thus, the Price Elasticity of Demand changes at different points on the demand curve.
Is price elasticity constant along demand curves?
explain why the price elasticity of demand varies along a demand curve, even if the demand curve is linear.
Difference between arc and point elasticity?
1) Point elasticity is measured by the ratio of the lower segment of the curve below the given point to uppa segment the super part of the curve above the point. 2) Arc elasticity is measured by the use of mid point between the old & the new figures in the case of both prine and qualitiy demonded.
3 Why is it difficult to judge the price elasticity of demand if you are merely observing the appearance of a demand curve on a graph?
Because elasticity is changes depending on the price it is evaluated at. This will then mean that elasticity is different at different point on a demand curve. It can also depend on the scale the demand curve is drawn to
What is difference between slope and the calculation of elasticity for a linear demand curve?
Along a linear demand curve elasticity varies from point to point of the demand curve with respect to different price, but slope is constant
Is the price elasticity constant along the demand curve?
Price elasticity of demand is equal to the instantaneous slope of the demand curve, or the slope of the tangent line at any point on the demand curve. So if the demand curve is represented by a straight downward sloping line, then yes, price elasticity of demand is equal to the slope of the demand curve. Otherwise, the slope at any point on the curve is changing, and you can find the it by taking the derivative of the demand curve function, which will find the Price elasticity of demand at any single point. Thus, the Price Elasticity of Demand changes at different points on the demand curve.
Is price elasticity constant along demand curves?
explain why the price elasticity of demand varies along a demand curve, even if the demand curve is linear.
Difference between arc and point elasticity?
1) Point elasticity is measured by the ratio of the lower segment of the curve below the given point to uppa segment the super part of the curve above the point. 2) Arc elasticity is measured by the use of mid point between the old & the new figures in the case of both prine and qualitiy demonded.
3 Why is it difficult to judge the price elasticity of demand if you are merely observing the appearance of a demand curve on a graph?
Because elasticity is changes depending on the price it is evaluated at. This will then mean that elasticity is different at different point on a demand curve. It can also depend on the scale the demand curve is drawn to
When demand curve is rectangular Hyperbola the elasticity of demand will be?
Unitary Elactic
Why The horizontal axis of a demand curve displays?
elasticity
A demand curve with Unitary Elasticity at all points is?
Is negatively sloped linear curve
Why is the demand curve not representative of price elasticity?
price elasticities are always negative hence brings ambiguities in the demand curve
Explain the difference between price elasticity of demand and the slope of a demand curve?
Price elasticity is a specific type of slope of the demand curve. A perfectly inelastic demand means that the quantity will not change with the price. This line is perfectly vertical. A perfectly elastic demand curve is horizontal and means that at any given quantity, there is only one price. Also, a slope gets steeper, demand becomes more inelastic.
What is the equilibrium of a firm?
The equilibrium of a firm depends with the elasticity of a demand curve.
Explain the difference between elasticity of demand and the slope of a demand curve?
The demand curve is drawn with price on the vertical axis and quantity demanded on the horizontal axis. Mathematically, the slope of a curve is represented by rise over run, or the change in the variable on the vertical axis divided by the change in the variable on the horizontal axis. Therefore, the slope of the demand curve represents change in price divided by change in quantity. Elasticity, on the other hand, aims to quantify the responsiveness of demand and supply to changes in price, income, or other determinants of demand.
