publication . Article . 2013

On Teaching Price Elasticity of Demand and Change in Revenue due to Price Change -- A Synthesis with and without Calculus

Jong-Shin Wei;
Open Access
  • Published: 01 Jan 2013 Journal: International Journal of Business and Economics, volume 12, issue 1 June, pages 1-14
Abstract
Price elasticity of demand measures how much, in terms of percentage change, the quantity demanded responds to a change in price. In this pedagogical note, first we intuitively introduce the very first notion of price elasticity, which is a directional measure because it describes the impact of an arbitrary change in price from one to another on the percentage change in quantity demanded. Next, we show how this measure becomes "point" price elasticity of demand when demand is linear. Finally, with help from calculus, we show how it leads to the development of (point) price elasticity of demand in general. At each stage, qualitative results concerning changes in ...
Subjects
free text keywords: elasticity; revenue; demand function, jel:A22, jel:B41, jel:D00, jel:C00, Economics, Calculus, Price elasticity of supply, Cross elasticity of demand, Complementary good, Total revenue test, Law of demand, Price elasticity of demand, Reservation price, Wealth elasticity of demand, Microeconomics
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publication . Article . 2013

On Teaching Price Elasticity of Demand and Change in Revenue due to Price Change -- A Synthesis with and without Calculus

Jong-Shin Wei;