slope of demand and elasticity of demand are not related with each other
Answers
Answer:
Again, slope refers to the steepness of the demand curve. In fact, slope of the demand function measures the steepness or flatness of the function. Thus, the slope and elasticity of demand are related but are not the same thing.
Answer:
Let us first understand the meaning of elasticity of demand.
Elasticity of demand is nothing but the responsiveness of demand when the price changes. We must firstly understand that price and demand have an inverse relationship, assuming other things as same. Hence, a consumer will demand more when price falls and less when the price rises. So, demand responds to price. But the degree of responsiveness (more or less) is something which can be understood by elasticity of demand.
Following points must be noted here,
More the responsiveness of demand when the price changes, it will be more elastic (Demand reacts more than price, it will be more elastic).
On the other hand if the demand responds very less as compare to price,it will be less elastic (Demand reacts less than price, it will be less elastic).
Symbolically, it can be shown as follows:
Ed= % ∆Qd/ % ∆P
Where,
Ed= Elasticity of demand
Qd= Quantity demanded
P= Price