Does anyone know how to explain the concept of elasticity, particularly the fact that the elasticity changes as one moves along the Demand curve?
Economics - Financial Markets
Stacey Warren - Expert brainly.com
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elasticity of demand related with price represents the responsiveness of quantity demanded to the price change...(sorry for my broken english but idk these in Eng even though i know in Albanian)
|dw:1319466313725:dw| Hope this helps :) ^_^
Elasticity is low for low-demand items (luxury). Elasticity is also low for necessity vital products (that are usually right most on the demand curve).
The best way to explain it is to use the term elastic. Elastic will stretch when a force is exercised at either end. For example, when a kid try to pull a flexible elastic, she will be a able to make this elastic twice as longer. This represents the high elasticity when a small move of the force (price) will lead to a big move in the length of the elastic (demand). This is a nice example that I give to my students when I discuss micro with them.
I agree with Angela and Bilalak and try to extend the concept of elasticity. when v consider it as a ratio of % change in demand to % change in price, as v move along the demand curve.......@ the middle point of the demand curve the price elasticity = 1 and in the upper part of the demand curve it will be > 1 and lower part of the demand curve it will be <1. this is because as v move from left upper to right lower more and more change v see in demand due to small changes in price........
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\[\xi =DeltaQ \div DeltaP\]
Elasticity means that if the price changes as 1%, the quantity demanded or supplied will be changed as \[\Delta\] percent. In math, we can see that elasticity will affect the slope of our curve. In economic term, elasticity measures the effect from in every times price changes to its quantity. Why this is so important? Because it will affect the burden in market if there are intervention or nature of consumers and producers.
ACTUALLY I ASKED THIS QUESTION AS AN EARLY TEST OF HOW "OPEN STUDY" WOULD WORK, BUT IT IS A PLEASURE TO FIND THAT A NUMBER OF STUDENTS UNDERSTAND THE CONCEPT. I HAVE YET TO PRESENT THIS TO MY CLASS, BUT WE WILL TALK ABOUT IT SHORTLY. WMW
YES, FOR THOSE OF YOU IN INDIA AND ELSEWHERE WHO HAVE TAKEN CALCULUS, THEN THIS IS AN EASY CONCEPT. FOR THOSE WHO HAVE NOT, IT CAN TAKE A "TON" OF EXPLAINING TO GET THIS CONCEPT ACROSS TO THE STUDENTS. CALCULUS MAKES UNDERSTANDING ECONOMICS SO MUCH EASIER. WMW