Measuring point elasticity on a non-linear demand curve, Managerial Economics

Measuring Point Elasticity on a Non-linear Demand Curve

Let's now explain the method of measuring point elasticity on a non-linear demand curve. Assume we want to measure the elasticity of demand curve DD' at point P in, let's draw a line (MN) tangent to the demand curve DD' at point P. Because demand curve DD' and the line MN pass through the same point (P) slope of demand curve and that of the line at this point is the same. So the elasticity of demand curve DD' at point P would be equal to the elasticity of demand line, MN, at point P.

Posted Date: 8/10/2013 3:28:40 AM | Location : United States







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