Elasticity as Relative Slopes: A Graphical Approach to Linking the Concepts of Elasticity and Slope

Xudong Chen

The American Economist, 2017, vol. 62, issue 2, 258-267

Abstract: Price elasticity and the slope of a demand or supply curve are closely related concepts that address the relationship between a price change and the resulting quantity change. At times, however, the link between these two concepts can appear to be counterintuitive, presenting potential pedagogical challenge. We propose a graphical approach by expressing the elasticity as relative slopes, and perform a comprehensive examination of how price elasticity varies along a demand or supply curve, both in linear and nonlinear cases. We suggest that this less well-known technique provides a viable alternative to facilitate better understanding of the seemingly elusive link between elasticity and slope.

Keywords: price elasticity of demand and supply; slope; relative slopes; demand curve; supply curve (search for similar items in EconPapers)
JEL-codes: A22 D11 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:sae:amerec:v:62:y:2017:i:2:p:258-267

DOI: 10.1177/0569434516682713

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