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A note on the arc elacticity of demand

Author

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  • Andrés Vázquez

    (Consejo Superior de Investigación Científica)

Abstract

This note presents a simple alternative measure for the arc elasticity of demand which comes naturally and does retain the salient characteristics of the point demand elasticity. A remarkable feature is that it equals the point demand elasticity at some point inside the interval, thus leading to the exact estimation of the point demand elasticity when this is constant. It also ensures that the relationships between the arc demand elasticity and the arc revenue elasticities keep exact formal analogy with those well known for the point elasticity case.

Suggested Citation

  • Andrés Vázquez, 1995. "A note on the arc elacticity of demand," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 10(2), pages 221-228.
    • Handle: RePEc:emx:esteco:v:10:y:1995:i:2:p:221-228
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    File URL: https://estudioseconomicos.colmex.mx/index.php/economicos/article/view/264/266
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    References listed on IDEAS

    as
    1. C. C. Holt & P. A. Samuelson, 1946. "The Graphic Depiction of Elasticity of Demand," Journal of Political Economy, University of Chicago Press, vol. 54(4), pages 354-354.
    2. R. G. D. Allen, 1934. "The Concept of Arc Elasticity of Demand: I," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 1(3), pages 226-229.
    3. A. P. Lerner, 1933. "The Diagrammatical Representation of Elasticity of Demand," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 1(1), pages 39-44.
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    Cited by:

    1. Gahler, Daniel & Hruschka, Harald, 2016. "Resource Allocation Heuristics for Unknown Sales Response Functions with Additive Disturbances," University of Regensburg Working Papers in Business, Economics and Management Information Systems 488, University of Regensburg, Department of Economics.

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