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Question
Draw a straight-line demand curve joining both the axes. Indicate the following on the demand curve.
Elasticity of demand is equal to zero
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Solution
A straight-line demand curve joining both the axes is shown below:
The elasticity of demand is different at different points.
`"measured by Elasticity" = "Lower segment of demand curve"/ "Upper segment of demand curve"`
The elasticity of demand is equal to zero at point A on the diagram, as the lower segment is zero.
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