#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4

In our example, then, the arc elasticity of demand would be:

E=ΔQQavgΔPPavg=−4009,00015.5=−0.244

If you want to change selection, open document below and click on "Move attachment"

4.1. Own-Price Elasticity of Demand
are then earning €9.90. So, by receiving first a 10 percent raise and then a 10 percent cut in wage, you are worse off. The reason for this is that we typically use the original value as the base, or denominator, for calculating percentages.) <span>In our example, then, the arc elasticity of demand would be: E=ΔQQavgΔPPavg=−4009,00015.5=−0.244 There are two special cases in which linear demand curves have the same elasticity at all points: vertical demand curves and horizontal demand curves. Consider a vertical d