A note on the arc elasticity of demand

Authors

  • Andrés Vázquez Consejo Superior de Investigaciones Científicas

DOI:

https://doi.org/10.24201/ee.v10i2.264

Keywords:

arc elasticity of demand

Abstract

This note presents a simple alternative measure for the arc elasticity of demand which comes naturally and does retain the salient characteristics of the point demand elasticity. A remarkable feature is that it equals the point demand elasticity at some point inside the interval, thus leading to the exact estimation of the point demand elasticity when this is constant. It also ensures that the relationships between the arc demand elasticity and the arc revenue elasticities keep exact formal analogy with those well-known for the point elasticity case.

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References

Allen, R. G. D. (1934). "The Concept of Arc Elasticity of Demand", Review of Economic Studies, vol. 1, pp. 226-230.

Cauchy, A. L. (1821). Cours d'analyse de l'École Royale Polytechnique, 1ère partie, Analyse algébrique (Oeuvres complètes, IIe, série III). Paris, Gauthier-Villars et Fils, Imprimeurs-Libraires.

Dalton, H. (1920). Some Aspects of the Inequality of Incomes in Modern Communities, London, George Routledge & Sons.

Gallego-Díaz, J. (1944/1945). "A Note on the Arc Elasticity of Demand", Review of Economic Studies, vol. 12, pp. 114-115.

Holt, Ch. C, and P. A. Samuelson (1946). "The Graphic Depiction of Elasticity of Demand", Journal of Political Economy, vol. 54, pp. 354-357.

Lerner, A. P. (1933). "The Diagrammatical Representation of Elasticity of Demand", Review of Economic Studies, vol. 1, pp. 39-44.

Roy, R. (1942). "Henry Schultz, Pionnier de l'Économétrie", in O. Lange, F. Mclntyre and T. Yntema (eds.), Studies in Mathematics and Econometrics, Chicago, The University of Chicago Press, pp. 18-31.

Schultz, H. (1928). Statistical Laws of Demand and Supply with Special Application to Sugar, Chicago, The University of Chicago Press.

Vázquez, A. (1985a). "Geometrical Measurement of the Elasticity of Demand and the Elasticities of Total Revenue", Giornale degli Economisti e Annali di Economia, voi. 44, pp. 657-665.

Vázquez, A. (1985b). "Geometrical Analysis of the Arc Elasticity of Demand and the Changes in Total Revenue", Canadian Journal of Agricultural Economics, vol. 33, pp. 387-395.

Vázquez, A. (1989). "A Note on the Application of the Derivation of Price Elasticity of Demand from Total Revenue Response to Price Changes: Some Clarifications", Economic Notes, vol. 19, pp. 423-431.

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Published

1995-07-01

How to Cite

Vázquez, A. (1995). A note on the arc elasticity of demand. Estudios Económicos De El Colegio De México, 10(2), 221–228. https://doi.org/10.24201/ee.v10i2.264
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Issue

20-vol. 10, no. 2, july-december, 1995

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Articles

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