3 Most Important Sets of Curves of Elasticity Slops in Managerial Economics

(i) Two Curves have Same Elasticity but Different Values of Slope:

In figure 4.5, two demand curves AF and AE have different slopes (i.e, AE steeper than AF)

(ii) Two Curves have Different Values of Elasticity but Same Slope:

When we consider two parallel lines, we find that slope are same but the elasticities of the two curves differ with each other at any given price (figure 4.6). The slope of the demand curve AB is – AO / OB and that of CD is – CO / OD.

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Since the demand curves are parallel to each other, then AO / OB = CO / OD. Hence, the slope are equal. The elasticity of AB is measured as – EB / AF, whereas for the demand curve CD, elasticity is – ED / CE. In the figure we find that ED = FB and AF > CE. Obviously, elasticity of CD is more than that of AB at price P.

(iii) Two Curves have Different Elasticities and Different Values of Slope:

If the demand curves intersect each other, the elasticities as well as the slope differ simultaneously (figure 4.7). For example, the demand curves AB and CD intersect each other at point y.