Point elasticity, Microeconomics

Assignment Help:

Point Elasticity:

Point elasticity is brought in use when the change in price is quite small, which means. The two points between which elasticity is being measured or calculated essentially collapse on each other. Differential calculus is used to calculate the instantaneous rate of the change of quantity with respect to changes in cost

(dQ/dP) and after this it is multiplied by P/Q, where P and Q are the coat and quantity obtaining at the instant of interest. The formula for point elasticity can be given as:

?=?QxP

? P Q

 

Or this formula can also be written as follows:

?=dQxP

d P Q

 

Where d = infinitely small change in cost.


Related Discussions:- Point elasticity

The economy is in the steady state, Assume in the Solow growth model that s...

Assume in the Solow growth model that s=.25, n=.02, d=.08, and f(k)=k^3. A)    Assume that z=2.  What is the steady state level of capital per worker and consumption per worker?

Determine the harrod-domar model, What barriers to economic growth can be e...

What barriers to economic growth can be explained using the Harrod-Domar model? Definition and outline of the Harrod-Domar model; growth in national income = savings ratio over

Elastic and inelastic demand, Elastic and Inelastic Demand can be understoo...

Elastic and Inelastic Demand can be understood as follows: Slope and elasticity of demand have an inverse relationship between them. When slope is high elasticity of demand bec

Differentiate between the short and the long run, Problem 1: i) Differe...

Problem 1: i) Differentiate between the short and the long run. ii) How is production characterised the short run? Explain the fully using numerical and diagrammatic illustr

What are the properties of cost function, What are the properties of cost f...

What are the properties of cost function? Properties of Cost Functions: Some similarities are here with consumer theory. Such similarities are actually exact while one compa

Trend and structure of income, TREND AND STRUCTURE OF INCOME: Each sec...

TREND AND STRUCTURE OF INCOME: Each sector of the economy employs natural, human and material resources and contributes to the aggregate flow of goods and services during a gi

Describe the term price elasticity of demand, Problem : (a) Describe th...

Problem : (a) Describe the law of demand and the factors affecting demand. (b) llustrate and  Explain how demand of a commodity will change if there is a tax on that product

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd