Figure 5.4 We have noted that a linear demand curve is more elastic where prices are relatively high and quantities relatively low and less elastic where prices are relatively low and quantities relatively high We can be even more specific For any linear demand curve, demand will be price elastic in the upper half of the curve and price inelastic in its lower half At the midpoint of a linear demand curve, demand is unit price elastic Constant Price Elasticity of Demand Curves Figure 5.5 "Demand Curves with Constant Price Elasticities" shows four demand curves over which price elasticity of demand is the same at all points The demand curve in Panel (a) is vertical This means that price changes have no effect on quantity demanded The numerator of the formula given in Equation 5.2 for the price elasticity of demand (percentage change in quantity demanded) is zero The price elasticity of Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 246