When the demand curve is a downward-sloping straight line?
When the demand curve is a downward-sloping straight line?
A straight line, downward – sloping demand curve implies that, as price falls, the elasticity of demand .
What is a straight line demand curve?
Straight line (linear) demand curve If the demand curve is linear (straight line), it has a unitary elasticity at the midpoint. The total revenue is maximum at this point. Any point above the midpoint has elasticity greater than 1, (Ed > 1). Here, price reduction leads to an increase in the total revenue (expenditure).
Is price elasticity of demand constant throughout a downward-sloping straight line demand curve?
Along any downward-sloping straight-line demand curve b) the price elasticity varies but the slope is constant.
What is the nature of a horizontal straight line demand curve?
A horizontal straight line demand curve shows zero elasticity of demand.
Which elasticity is represented by a straight line quizlet?
The constant unitary elasticity is a straight line because the curve slopes upward and both price and quantity are increasing proportionally. earn the same revenue whether it (moderately) increases or decreases the price of tickets.
Which demand curve above is relatively more elastic?
flatter curve
A flatter curve is relatively more elastic than a steeper curve. Availability of substitutes, a goods necessity, and a consumers income all affect the relative elasticity of demand.
Can demand curve be straight?
Demand curve could become straight, but it is more reasonable to be curved. Changes are not always same. If changes always follow a general ratio then there is a chance to be demand curve straight but change following a ratio is very rare case.
What is straight line in economics?
Straight line basis is a method of calculating depreciation and amortization, the process of expensing an asset over a longer period of time than when it was purchased. It is calculated by dividing the difference between an asset’s cost and its expected salvage value by the number of years it is expected to be used.
Why is the slope of downward sloping straight line negative?
m is the slope. A downward sloping straight line will have a negative value of m. What this means is that as x increases in value, y decreases in value. Thus there is a negative correlation between the variables x and y.
Is the slope of the demand curve elasticity?
Elasticity affects the slope of a product’s demand curve. A greater slope means a steeper demand curve and a less-elastic product. Clearly, the flatter demand curve shows a much greater quantity demanded response to a price change. Therefore, it is more elastic.
What is the type of demand curve?
Demand curve has two types individual demand curve and market demand curve. It can be created by plotting price and quantity demanded on a graph. In demand curve, the price is represented on Y-axis, while the quantity demanded is represented on X-axis on graph.
What does the slope of demand curve measure?
Since slope is defined as the change in the variable on the y-axis divided by the change in the variable on the x-axis, the slope of the demand curve equals the change in price divided by the change in quantity. To calculate the slope of a demand curve, take two points on the curve.
What is the meaning of the negative slope of demand curve?
This is very basic concept,the negative slope of demand curve itself represents the law of demand. “Ceteris paribus” or other things remaining same, demand for a commodity is having a negative relationship with price that is,If price increases demand falls and vice versa.
What happens when two straight line demand curves intersect?
If any two straight line demand curves intersect each other, then, at any particular price of the good concerned, the steeper line would have a lower e and the flatter line would have a higher e. The point is established with the help of Fig. 2.11 where, at the price p = OP, the straight line demand curves AB and CD have intersected at the point F.
What is an example of a curvilinear demand curve?
For example, the value of e at the point R (p, q) on the curvilinear demand curve DD in Fig. 2.5 and the value of e at the same point, R, on the straight line demand curve AB which is a tangent to DD at the point R, are both equal to RB/RA.
Which demand curve is more elastic?
Therefore, if the two straight line demand curves intersect, then, of them, the steeper line would be less elastic and the flatter line would be more elastic. Obviously, these two lines would be non-iso-elastic. Type # 5. Vertical and Horizontal Demand Curves:
