We have shown a general method of expressing elasticities using the expression below. This simply shows the ratio of the percentage change in two variables:

There are a number of ways that elasticities can be computed depending on the level of study, or the application of interest. You may recall that when computing a percentage, one must be careful about the base used. For instance, a change between the quantities 90 and 100 is a 10% change using 100 as the base, but it is a change of more than 11% using 90 as the base.

One method of resolving this dilemma is with an **arc elasticity**.

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