ECON1001 Lecture 6: ECON1001-Lecture-6-Notes
13 Aug 2018
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At times we are interested in the elasticity at a particular point. Here we use to point method of calculating elasticity. y y x x y x x y dy x dx y. Suppose the demand curve for forks is given by q = 100 2p, and the price of forks is p = 30. From the demand equation, we know that when p = 30, q = 40. Substituting these values into the point formula gives: Here we can see x = p and y = q: the interpretation is: at this price, if the price of forks increases by 1%, the quantity demanded of forks falls by 1. 5%. Sometimes we are interested in elasticity when moving from one point to another. m m y y x x y x x y m m where: m y y. When the price of spoons is , the quantity demanded is 50 units.
