Practicing Success
What will be the price elasticity of demand at mid point in case of a straight line demand curve that meets the end of the axis? |
equal to 1 less than 1 greater than 1 Information not sufficient |
equal to 1 |
Point elasticity is the price elasticity of demand at a specific point on the demand curve instead of over a range of it. It can be measured by dividing lower segment by upper segment. Price elasticity of demand = \(\frac{\text {Lower segment }}{\text { Upper segment}}\) As, lower segment = upper segment (because it is the mid point of the demand curve that meets both the axis) Ped = 1 |