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Nilanjan Bhowmick AIR 3, CSIR NET (Earth Science)
Nisha Sharma posted an Question
July 29, 2021 • 23:39 pm
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30 points
30 points
- UGC NET
- Commerce
Mam please xplain straight line demand curve, convex denand curve & arc method
mam please xplain straight line demand curve, convex denand curve & arc method
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Rucha rajesh shingvekar
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Due to differences in income and taste, you can be confident that the intercept of different buyers' demand curves will not be the same. The wider is the range of the intercepts of a given number of linear individual demand curves with given slopes, the more convex will be the market demand curve.
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Rucha rajesh shingvekar
Straight line (linear) demand curve If the demand curve is linear (straight line), it has a unitary elasticity at the midpoint. The total revenue is maximum at this point. Any point above the midpoint has elasticity greater than 1, (Ed > 1). Here, price reduction leads to an increase in the total revenue (expenditure).
![linear-demand-curve.jpg]()
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Rucha rajesh shingvekar
Arc elasticity measures elasticity at the midpoint between two selected points on the demand curve by using a midpoint between the two points. The arc elasticity of demand can be calculated as: Arc Ed = [(Qd2 – Qd1) / midpoint Qd] ÷ [(P2 – P1) / midpoint P]