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Measurement of arc price elasticity

Measures of arc price elasticity tend to be more accurate and precise than measures of point price elasticity since: (w) arc elasticity is more sensitive to the dependent variable. (x) point elasticity is additionally sensitive to the independent variable. (y) arc elasticity measures don’t depend upon whether variables begin at the higher or lower initial quantities or prices. (z) point elasticity is most precise only while one of the variables is constant.

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