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Differentiate between point and arc elasticity of demand.

Differentiate between point and arc elasticity of demand.

Answers

Faith
1. Point elasticity
Point elasticity is the proportionate change in quantity demanded resulting from a proportionate change in price at a particular point along the demand curve.
When calculating point elasticity, it is assumed that the slope of the demand function is known.
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2. Arc Elasticity
Arc elasticity is a measure of the average elasticity; i.e. the elasticity at the mid point of the chord that connects 2 points (A and B) along the demand curve defined by the initial and the new price levels.
elas36320191034.png
Faimus answered the question on January 16, 2019 at 19:31

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