What will be the elasticity of demand at the middle of demand curve?
Answers
The elasticity of demand for any commodity or product varies along a linear demand curve based on price sensitivity or responsiveness of the consumers or buyers.Exactly in the middle of a linear demand curve,the elasticity of demand is is equal to 1 or the price elasticity of demand is unitary elastic.
Explanation:
The price elasticity of demand for any commodity varies along its linear demand curve as the price sensitivity or responsiveness of the consumers or buyers varies at various stages of consumption of any particular commodity.During the initial stages of consumption,the consumers or buyers are usually more responsive or sensitive to respective changes in commodity price and hence,the price elasticity of demand for the commodity is relative elastic.As the quantity demanded of the consumers increases with proportionate decline in the commodity market price,they become increasingly less sensitive or responsive about further changes in commodity prices and thus,the price elasticity of demand of the commodity also starts decreasing with further decrease in commodity price.Therefore,at the middle of any linear demand curve the price elasticity of demand becomes equal to 1 or unitary elastic compared to relative elastic during the initial stages of consumption.