Authors libby rittenberg 246

Figure 5.4

We have noted that a linear demand curve is more elastic where prices are
relatively high and quantities relatively low and less elastic where prices
are relatively low and quantities relatively high. We can be even more
specific. For any linear demand curve, demand will be price elastic in the
upper half of the curve and price inelastic in its lower half. At the midpoint of
a linear demand curve, demand is unit price elastic.

Constant Price Elasticity of Demand Curves
Figure 5.5 "Demand Curves with Constant Price Elasticities" shows four
demand curves over which price elasticity of demand is the same at all
points. The demand curve in Panel (a) is vertical. This means that price
changes have no effect on quantity demanded. The numerator of the
formula given in Equation 5.2 for the price elasticity of demand
(percentage change in quantity demanded) is zero. The price elasticity of
Attributed to Libby Rittenberg and Timothy Tregarthen
Saylor URL: />
Saylor.org

246