Variation In Price Elasticity Of Demand Along The Length Of A Straight Line Demand Curve
Economics notes
Variation In Price Elasticity Of Demand Along The Length Of A Straight Line Demand Curve
➡️ Price elasticity of demand is the measure of how responsive the quantity demanded of a good is to a change in its price.
➡️ Along a straight line demand curve, the price elasticity of demand varies from being perfectly inelastic at one end to perfectly elastic at the other.
➡️ At the midpoint of the demand curve, the price elasticity of demand is unitary elastic, meaning that a change in price will cause an equal proportional change in quantity demanded.
➡️ At the inelastic end of the demand curve, a change in price will cause a smaller proportional change in quantity demanded.
➡️ At the elastic end of the demand curve, a change in price will cause a larger proportional change in quantity demanded.
What is the variation in price elasticity of demand along a straight line demand curve?
The price elasticity of demand along a straight line demand curve varies inversely with the price. As the price increases, the price elasticity of demand decreases, and vice versa.
How does the price elasticity of demand affect the shape of a straight line demand curve?
The price elasticity of demand affects the shape of a straight line demand curve by determining the slope of the curve. The steeper the slope, the higher the price elasticity of demand.
What factors influence the price elasticity of demand along a straight line demand curve?
Factors that influence the price elasticity of demand along a straight line demand curve include the availability of substitutes, the proportion of income spent on the good, and the necessity of the good.