Explain the Geometric Method of Measurement of Elasticity
Explain the Geometric Method of Measurement of Elasticity.
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Geometric or Point method: It developed by Marshall. It is used as a measure of the change in quantity demanded in way to a very small change in the price. Under this method we can measure the elasticity at any of given point on a straight line demand curve using the given formula as:ED = Lower section of the Demand curve/Upper section of Demand curve.
In the given diagram, AB is a straight line demand curve along with P as its middle point. Further this is assumed as AB is 6 cm. so,
ED = PB/PA=3/3=1; at point P
ED = P1B/P1A= 4.5/1.5= 3=>1; at point P1
ED = AB/A= 6/0= α (infinity); at point A
ED = P2B/P2A = 1.5/4.5 = 1/3 = <1; at point P2
ED = B/BA = 0/6 = 0; at point B
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The arc elasticity of Plastibristle’s demand for labor in between point c and point d is approximately: (1) 0.375. (3) 0.545. (4) 0.833. (4) 1.200 (5) 2.000. Discover Q & A Leading Solution Library Avail More Than 1429974 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads No hassle, Instant Access Start Discovering 18,76,764 1948095 Asked 3,689 Active Tutors 1429974 Questions Answered Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!! Submit Assignment
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