Practicing Success
Which method measures elasticity of demand at a point on a straight line demand curve as the ratio of the lower segment and the upper segment of the demand curve at that point? |
Percentage Method Total Expenditure Method Geometric Method Arc Method |
Geometric Method |
The correct answer is Option (3) → Geometric Method Geometric Measure of Elasticity along a Linear Demand Curve : The elasticity of a linear demand curve can easily be measured geometrically. The elasticity of demand at any point on a straight line demand curve is given by the ratio of the lower segment and the upper segment of the demand curve at that point. |