WOLFRAM NOTEBOOK

WOLFRAM|DEMONSTRATIONS PROJECT

Constant Price Elasticity of Demand

​
A
5
ϵ
-1
p
0
2
quantity scale
10
revenue scale
14
The inverse demand function
P=A
1
ϵ
Q
has a constant price elasticity of demand
ϵ
. The revenue is shown as an area in the upper quadrant and is also plotted as the height of the function in the lower quadrant. As the price falls, the revenue area decreases for inelastic demand (
-1<ϵ<0
), remains constant for unit elastic demand (
ϵ=-1
), and increases for elastic demand (
ϵ<-1
).
Wolfram Cloud

You are using a browser not supported by the Wolfram Cloud

Supported browsers include recent versions of Chrome, Edge, Firefox and Safari.


I understand and wish to continue anyway »

You are using a browser not supported by the Wolfram Cloud. Supported browsers include recent versions of Chrome, Edge, Firefox and Safari.