Geometric Method of Determining Price Elasticity of Demand
This method was also suggested by Prof. Marshall. According to the Geometric Method, also known as the Graphic Method, Point Method, or Arc Method, the elasticity of demand for a commodity is measured at a point on the demand curve. The Geometric Method of determining the Price Elasticity of Demand is used when there an infinitely small changes in the demand and price of a commodity. It means that the Elasticity of Demand for such commodities is different at different points on the same straight line demand curve. The formula to measure Ed of a commodity under the Geometric Method is:
Methods of Measuring Price Elasticity of Demand: Percentage and Geometric Method
The quantity of a good or service that a consumer is willing and able to purchase at different price levels available during a given time period is known as Demand. Generally, demand is interchangeably used with want and desire; however, in economics these terms are different. Desire is just a wish of a consumer to purchase a commodity even though he is unable to buy it. However, demand is a consumer’s desire to purchase a commodity, provided he is willing to spend and has sufficient purchasing power.
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