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in Theory of Consumer Behaviour by (26.8k points)
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Why there is different price elasticity along a linear demand curve? Illustrate with the help of a diagram.

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The price elasticity of a linear demand curve is based on slope of demand curve. Slope of the demand curve is the ratio between change in quantity demanded (∆q) to change in price (∆p). So the slope of a demand curve will be different at different points. This can be explained with diagram.

1. When the demand curve cuts the 'x' axis |eD| = 0

2. When the demand curve cuts the 'y' axis |eD| = ∝

3. At the mid point of the demand curve |eD| = 1

4. Between mid point and the point where the demand curve cuts the 'X' axis |eD|<1

5. Between mid point and the point where the demand curve cuts the 'y' axis |eD|>1

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