When the demand curve is linear, the red expression is constant: it's just the slope of the demand curve. The blue expression, however, depends on the point at which the elasticity is calculated; even for a linear demand curve, it is not constant.

Apr 28, 2022 · Therefore the demand curve must be vertical, no matter what the price the quantity demanded is same, hence the price elasticity is zero. (dq/dp)(p/q) = 0, because (dq/dp) = 0 Tags Economics

Jan 26, 2021 · Hi, I am self-studying microeconomics in preparation for a future course. I am confused about whether or not it is possible to visually determine the elasticity of a demand/supply curve by looking at its slope. Some sources I read tell you that the elasticity can be determined visually based on the steepness of the slope of the demand/supply curve.

Oct 30, 2023 · If we consider 1st assumption the demand curve would be discontinuous (i.e when price reaches 10 Q=25, there won't be horizontal line between 0 and 25 ).But as per the definition of reservation price what is correct, at reservation price the consumer would surely buy or will be indifferent? $\endgroup$ –

Jul 4, 2019 · The two elasticities of demand for these two prices would be $\epsilon_{D}=5$ and $\epsilon_{D}=2$ for the higher and lower price respectively. In short, the elasticity of demand is a function of the responsiveness of quantity demanded to changes in prices that depends on the current price/quantity combination. At a higher point up the demand ...

Dec 9, 2021 · Later they also demarcate different regions of the curve, where the region to the northwest of the curve's midpoint shows elastic demand, and the region southeast of the midpoint inelastic demand. I'm a little confused however on how to combine these two aspects.

Jul 14, 2016 · Price elasticity of demand is related (but not equal) to the inverse of the slope of the demand curve. This Wikipedia article defines PED as : Price elasticity of demand (PED or Ed) is a measure used in economics to show the responsiveness, or elasticity, of the quantity demanded of a good or service to a change in its price, ceteris paribus.

However on a demand and supply graph, when the demand shifts to the right, the price will increase. Yes, when the demand curve shifts to the right (all else equal), the equilibrium market price rises to account for the fact that consumers are now willing to pay more. The increase in price is the mechanism by which excess demand at the initial ...

Oct 5, 2016 · "Readers trained in other disciplines often wonder why economists plot demand curves with price on the vertical axis. The normal convention is to put the independent variable on the X axis and the dependent variable on the Y axis. This convention calls for price to be plotted on the horizontal axis and quantity on the vertical axis.

Jul 10, 2019 · The answer is: it depends on how you model the demand curve of the good. Recall that the price elasticity of demand is given by \begin{equation} -\frac{\mathrm dQ}{\mathrm dP}\frac{P}{Q}=-\frac{1}{\text{slope}}\frac{P}{Q} \end{equation} where the slope is evaluated at the point $(Q,P)$. The quality improvement shifts demand curve to the right ...