Inelastic demand means that a change in price is met with a proportionally smaller change in quantity demanded. This might seem to suggest that
a steep demand curve, such as the one to the right, exhibits
inelastic demand. Let's see.
Inelastic demand means that a change in price is met with a proportionally smaller change in quantity demanded. This might seem to suggest that
a steep demand curve, such as the one to the right, exhibits
inelastic demand. Let's see.
The slope is the rise (vertical change) over (divided by) the run (horizontal change). For this demand curve a change in price of + 4 (rise) leads to a change in quantity demanded of -1 (run), so the slope is - 4.
Let's see if the slope tells us anything about the elasticity.
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