Economics Asked by Hunger Learn on March 23, 2021
Do the slope of a linear demand function and the elastisicy of demand coincide when we use specific preferences for pricing. As a paradigm, if we consider the case of CARA normal preferences, by solving the proble of the represenative conumer, we know that the demand function is a linear one. In this case the slope and the elasticity of the demand function coincide, but is this the case in general?
No, slope of a demand function is $frac{partial q(p)}{partial p}$ elasticity of demand is $frac{partial q(p)}{partial p} frac{p}{q(p)}$. So they cannot be same except in some special cases.
Correct answer by WilliamT on March 23, 2021
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