Chap004.4 - Price Elasticity and the Steepness of the...

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4 Chapter 4: Elasticity Slide 19 Price Elasticity and the Steepness of the Demand Curve 12 Quantity Price D 1 D 2 4 6 10 12 6 4 1 Observation If two demand curves have a point in common, the steeper curve must be less elastic with respect to price at that point Chapter 4: Elasticity Slide 20 Price Elasticity Regions along a Straight-Line Demand Curve Quantity b/2 a/2 a b 1 > ε 1 < ε 1 = ε Observation Price elasticity varies at every point along a straight- line demand curve Chapter 4: Elasticity Slide 21 Perfectly Elastic Demand Curve Quantity ) y (elasticit demand elastic Perfectly = Chapter 4: Elasticity
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