ECONOMICS question about ARC vs. POINT.

[GoldenGuppy]

Regarding PRICE ELASTICITY OF DEMAND what is arc vs. point? What does it mean? Thanks in advance...

Also can anybody recall the formula for price elasticity of supply?

Thanks

 

[BigSmooth]

I probably could have told you two or three years ago, but I think all the formulas trickled out of my head when they handed me my degree.

 

[GoldenGuppy]

lol

 

[Napalm381]

Elasticity over an arc would be the elasticity over a segment of a curve. I.E., (q2-q1)/(p2-p1).

Elasticity of a point is the elasticity of that exact point- dq/dp.

If you are looking at a linear function they are the same thing, but if you are looking at a non-linear demand curve (say a parabola) they will not be.

EDIT- clarification after I checked my micro textbook:
arc elasticity of demand = (p/q)*(delta(q)/delta(p))
point elasticity = (p/q)*(dq/dp) = d(ln Q)/d(ln P).