Question

. What is the relationship between price elasticity and position on the demand curve? For example,...

. What is the relationship between price elasticity and position on the demand curve? For example, as you move up the demand curve to higher prices and lower quantities, what happens to the measured elasticity? How would you explain that?

Homework Answers

Answer #1

At point R, Elasticity = 1 as the percentage change in QD=Percentage change in price

In the upper segment,price elasticity is greater than 1, as an increase in price will cause the quantity demanded to change by a greater percentage.At point P,the elasticity will be equal to infinity.

In the lower segment, price elasticity is less than 1 as the percentage change in quantity will be lower than the percentage change in price. At point Q, the elasticity will be equal to 0.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
what happens to the absolute value of the price elasticity of demand as you move up...
what happens to the absolute value of the price elasticity of demand as you move up a demand curve
1. What is the relationship between price elasticity of demand and revenues? How do you find...
1. What is the relationship between price elasticity of demand and revenues? How do you find the elasticity at any point on a linear demand curve? 2. What is the marginal utility of a dollar? How does our understanding of the rational consumer allow us to interpret demand as a schedule of marginal benefits? 3. Solve the consumer’s problem when utility is logarithmic, so that the marginal utility of an apple, say, is equal to 1/Qa, where Qa is the...
The difference between price elasticity of demand and income elasticity of demand is that A. income...
The difference between price elasticity of demand and income elasticity of demand is that A. income elasticity of demand examines how an​ individual's income changes when prices change and the price elasticity of demand examines how quantity demand changes when price changes. B. income elasticity measures the responsiveness of income to changes in supply while price elasticity of demand measures the responsiveness of demand to a change in price. C. income elasticity refers to a horizontal shift of the demand...
how do you draw the demand curve q=250-10p calculate the price elasticity of demand at prices...
how do you draw the demand curve q=250-10p calculate the price elasticity of demand at prices of $5, $10, and $15 to show how it changes as you move along this linear demand curve
The equation for a demand curve is P=2/Q. What is the elasticity of demand as price...
The equation for a demand curve is P=2/Q. What is the elasticity of demand as price falls from 5 to 4? What is the elasticity of demand as the prices falls from 9 to 8? Would you expect the answers to be the same? Why/why not?
Explain the price elasticity on a demand curve and state its relationship to a firm’s total...
Explain the price elasticity on a demand curve and state its relationship to a firm’s total revenue and relationship to the consumers total expenditure?
1) Firms are interested in the magnitude of the price elasticity of demand coefficient. The magnitude...
1) Firms are interested in the magnitude of the price elasticity of demand coefficient. The magnitude of ?? determines whether the demand for a good or service is elastic, inelastic or unit elastic. For the following cases indicate whether demand is elastic, inelastic or unit elastic. 1 < |??| < ∞ |??| = 1 0 < |??| < 1 2) 2, What happens to the absolute value of the price elasticity of demand as you move up a demand curve?
As you move up along the demand curve, the price elasticity of demand: Select one: a....
As you move up along the demand curve, the price elasticity of demand: Select one: a. Becomes more inelastic b. Is unchanged c. Becomes infinite d. Becomes more elastic e. Falls to zero
Relationship between total revenue and price elasticity of demand and explain how even due to good...
Relationship between total revenue and price elasticity of demand and explain how even due to good weather some farmers are worse off?
When the magnitude of the price elasticity of demand at a point along the linear demand...
When the magnitude of the price elasticity of demand at a point along the linear demand curve for a product is equal to the unit, then this magnitude is higher at any higher price and lower at any lower price. true or false