Unformatted text preview: or not very responsive to a change in price. The information about the value of elasticity therefore serves an important purpose in classification of various goods as elastic or inelastic in demand. This helps in several practical and policy applications such as taxation, foreign trade , monopoly, price determination etc. There are four methods of measurement of elasticity of demand. These are percentage , proportion , outlay and geometric or point elasticity methods. The one mentioned last (point elasticity method) is the most accurate and can be explained conveniently with a given demand curve:...
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- Fall '10
- Supply And Demand, Unit elastic demand, point elasticity methods