anyone know college level economics: "intuitively demand curves"

[robfilms]

here is the problem:

We have seen the following:

1) the Price Elasticity of Demand is NOT constant along a straight-line demand curve.

2) UNLESS that straight line demand curve is either perfectly elastic or perfectly inelastic.

Ignoring these two cases, draw, write the formula for and explain intuitively demand curves where the elasticity is constant at a value between 0 and infinity

any and all thoughts would be gretly appreciated.

be well

rob

[Seacrest]

If anyone here CAN answer this question, please report to the Treasury Department in Washington, DC ASAP.
Your country NEEDS you.
Now, more than ever.

[michaelb]

I remember and understand #1 and #2 for the most part. But I am lost at the use of the word "intuitively". Do you want someone to explain this "intuitively" or are you looking for an explanation of "intuitively demand curves" (whatever that is)?

[tenders]

I think the question means, "explain, in an intuitive way, demand curves where..."

The writer of the question was fancy to the point of opacity with his use of the adverb "intuitively" in such a way that it can only grammatically modify the word "explain." He/she was careless using prepositions. Instead of "demand curves where..." the question should have stated "demand curves for which...".

[Yoyodyne ArtWorks]

To me it makes more sense to say, "Price elasticity is constant along a straight-line demand curve when that curve is perfectly inelastic or perfectly elastic. Aside from these two examples, describe another demand curve where price elasticity is constant at a value between zero and infinity."

In other words, price elasticity will remain constant when demand stays the same regardless of price (perfect demand inelasticity) or demand will change by the exact same percentage as a change in price (perfect demand elasticity).

To answer the question, one could describe a demand curve where every five percent change in demand yielded a four percent change in price. For example, if the demand for a $10.00 widget goes up 5%, the price goes up 40 cents (4%). If demand falls by 5%, the price drops by 4%.

[testcase]

Can somebody translate this into English?

[ztirffritz]

I think that the answer is 'no'.

[Yoyodyne ArtWorks]

Let's look at three different scenarios:

1) Perfectly inelastic demand-Demand for a product stays the same regardless of price. Think of a commodity that people absolutely have to have, they literally can't live without it. Demand won't drop if the price goes up because there is no choice, people must buy the product. This is a theoretical model, not very likely in the real world; when prices get high enough alternative products/technologies become more viable.

2) Perfectly elastic demand-Consider a product that people don't absolutely need; it is a discretionary purchase. Unlike example #1, price will have a huge impact on demand; the more the price goes up, the less people will buy the product. When there is an exact relationship between demand and price (i.e., when the price doubles demand drops in half) you have perfectly elastic demand. (Again a theoretical model.)

3) Constant elastic demand-Price plays a consistent role in influencing demand, though not to the extent found in perfectly elastic demand. Here a 20% price increase might result in a 5% drop in demand. The key point is that the ratio between price increase and demand decrease would be consistent and predictable...hence the word "constant."

[Don C]

Interesting!

There are any number of syllables that I recognize in that statement and they have been juxtapositioned in new and creative ways to generate word-like combinations.