Price Elasticity and Linear Supply Curves.

This article discusses the behavior of price elasticity along linear demand functions. Prices and total revenues move together. About the most shown is that linear supply functions are unit elastic if they pass through the price-quantity origin when extended, elastic, if they intersect the price axi...

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Publicado en:American Economic Review Vol. 57; no. 4; pp. 905 - 909
Autor principal: Houck, James P.
Formato: Artículo
Publicado: American Economic Association Sep67
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Acceso en línea:Ver este registro en EBSCOhost
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      pub: American Economic Association
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        atl: Price Elasticity and Linear Supply Curves.
      aug:
        au: Houck, James P.
        affil: Associate Professor of Agricultural Economics, University of Minnesota.
      su:
        Elasticity (Economics)
        Demand function
        Prices
        Price flexibility
        Supply & demand
        Revenue
        Developing countries
      sug:
        subj:
          Elasticity (Economics)
          Demand function
          Prices
          Price flexibility
          Supply & demand
          Revenue
          Developing countries
      ab: This article discusses the behavior of price elasticity along linear demand functions. Prices and total revenues move together. About the most shown is that linear supply functions are unit elastic if they pass through the price-quantity origin when extended, elastic, if they intersect the price axis and inelastic, if they intersect the quantity axis. Several recent studies used linear functions to estimate production response and supply elasticity for important commodities in less developed nations. In each of these studies, policy implications might have been sharpened had price elasticity behavior along the estimated linear supply curves been considered in conjunction with the published elasticity estimates computed at mean values. The supply elasticity varies along any linear supply function, which does not intersect the origin. At higher prices and outputs, the linear function's elasticity approaches +1.0, the speed of approach depending upon the size of the price or quantity axis intercept. Sellers' total revenue always increases along any positively sloped supply curve as price rises.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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          year: 1967
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