Elasticity

Inelastic

Inelastic

1 > x

Elastic

1 < x

perfectly elastic

x = 1

Perfectly elastic

x = 0

arc elasticity formula

(Q1 + Q2)/ ((Q1-Q2)/2) / (P1 + P2)/ ((P1-P2)/2)

normal elasticity formula

(Q1-Q2)/ Q1 / (P1-P2)/P1

What does arc elasticity measure

the responsiveness of demand to price changes over a range of values on a larger scale

What does elasticity measure

the responsiveness of one variable to changes in another variable on a smaller scale