Which of the following elasticities measure a movement along a curve rather than a shift in...

Which of the following elasticities measure a movement along a curve rather than a shift in the curve? (a) The price elasticity of demand, (b) the income elasticity of demand (c) the cross elasticity of demand, or (d) all of them

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Expert Solution

Price elasticity of demand.
Price elasticity of demand measure the change in the level of quantity with respect to change in price level. Change in price cause change in the slope of the demand curve. The higher rise in price depicts using steeper demand curve. If the price level increased the slope of the curve will be smaller and the curve become steeper; and vice versa. The shift of the curve occurred with change in factors other than price. Cross elasticity measures the change in quantity with respect to change in the price of other commodities. And income elasticity shows the change in quantity with reference to change in income of the consumers. Both this elasticity will create a shift in the demand curve rather than the change in slope. The changing slope shows the change in price level and the change in quantity demanded at the changing price level.

Rahul Sunny answered 1 year ago

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