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''Elasticity of demand at a common point will be more on a flatter curve than on a steeper curve''. Prove. |
Answer» Solution :In the given DIAGRAM, at point R the flatter demand CURVE `D_(1)D_(1)` is more elastic than the steeper curve DD. This is because at point R, PRICE and quantity are the same for both the curves. Now, for a given CHANGE in price, i.e., `Delta P`, the corresponding `Delta q` for the flatter curve `D_(1)D_(1)` is `Q Q_(2)` while for the steeper curve, it is `Q Q_(1), Q Q_(2)` is more than `Q Q_(1)`. Therefore, `Q Q_(2)` divided by `PP_(1)` on the flatter curve `D_(1)D_(1)` will be more than `Q Q_(1)` divided by `PP_(1)` on the steeper curve DD, i.e., `(Q Q_(2))/(PP_(1))gt (Q Q_(1))/(P P_(1))`. Hence, elasticity of demand will be more on a flatter curve `D_(1)D_(1)`, than on a steeper curve DD. |
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