Arc elasticity, Managerial Economics

Arc Elasticity

Is the average elasticity between two given points on the curve, i.e.

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Because of the negative relationship between price and quantity demanded, price elasticity of demand is negative. We there take the absolute magnitude of the number.

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Average Total Costs (ATC) This is total cost per unit of output, obtained by dividing total cost by total output i.e. ATC   =   Total Cost              Total Outp