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

Assignment Help:

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.


Related Discussions:- Measuring point elasticity on a non-linear demand curve

What is an effective need of demand, What is an effective need of demand ...

What is an effective need of demand 1.  An Effective Need: Effective need demands that there must be a need supported by the capacity and readiness to shell out. Henceforth there

Caselet 1, Plot the demand schedule and draw the demand curve for the data ...

Plot the demand schedule and draw the demand curve for the data given for Marijuana in the case.

Household, Household This refers to all the people who live under one ...

Household This refers to all the people who live under one roof and who make or are subject to others making for them, joint financial decisions. The household decisions are a

Show the fixed proportion production function, Q. Show the Fixed Proportion...

Q. Show the Fixed Proportion Production Function? A fixed proportion production function is one in that technology needs a fixed combination of inputs, say labour and capital,

Find the profit maximizing output and monopoly profit, The demand curve for...

The demand curve for the product of a monopolist is a straight line such that quantity just falls to zero at a price of Rs 20 per unit and that the maximum quantity (at zero price)

Income elasticity of different consumer goods, Income Elasticity of differe...

Income Elasticity of different consumer goods Commodities Coefficient of income elasticity Impact on expenditure Necessities

Advantages of the mixed economy, Advantages of the Mixed Economy Neces...

Advantages of the Mixed Economy Necessary services are provided in a true market economy, services which were not able to make profit would not be provided. Incentive:  Sin

Calculate the marginal product of labor, The production function of a small...

The production function of a small shop that frames pictures is Q = 5 √ LK where Q is the number of pictures framed per day, L is labor hours and K is the machine hours.

Structural unemployment, a)      In 1948, the money GNP was $520 billion an...

a)      In 1948, the money GNP was $520 billion and the price index was 120.  In order to   make the 1948 GNP comparable with the base year, the 1948 GNP must be adjusted    to:

Income elasticity, Income Elasticity The functional relationship among ...

Income Elasticity The functional relationship among the changes in the quantity demanded for a good or service and the change in income of those persons demanding the good or s

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd