arc elasticity

Discussion in 'CT7' started by neha.neu, Oct 13, 2009.

  1. neha.neu

    neha.neu Member

    if the demand curve of the commodity x is q=20-2p

    Calculate the demand elsticity when price rises from 1 to 2?

    the answer says -(1/4)

    while my answer is -.17:(
     
    neha.neu, Oct 13, 2009
    #1
  2. freddie

    freddie Member

    Are you sure it wasn't a price fall from 2 to 1? Then the answer would be -0.25.
     
    freddie, Oct 14, 2009
    #2
  3. neha.neu

    neha.neu Member

    yeah am sure. true if its a fall the point elasticity would be -.25 but the arc elasticity would still remain the same. how do we know which method to use?
     
    neha.neu, Oct 15, 2009
    #3

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