Re: About elasticity

In article <2qednTcGXvBSJ7nZRVn-gg@xxxxxxx>, "tonyp"
<tonyp@xxxxxxxxxxxxx> wrote:

"Robert Vienneau" <rvien@xxxxxxxxxxx> wrote

Q = a + b*P

Price elasticity:

e = 1/( 1 + (a/b) * (1/P) )

Notice that the price elasticity of an affine supply curve is
generally not a constant. It is a function of price. And, as
I said, it is dimensionless.

To a humble engineer like me, the parameter b seems important enough to
have
a fancy name. If economists do not call it "elasticity", that's OK.

"Slope" is the name Tony is seeking. I think engineers generally
appreciate the use of dimensionless parameters.

I suppose the student ought to be warned that supply and demand is,
at best, a phenomenological model. No reason exists to think such
functions exist away from whatever are current market prices.

Many introductory neoclassical textbooks are used to teach that
prices and quantities are determined by the interaction of
well-behaved supply and demand functions. But the theory is
incorrect, as has been known for decades.

--
Mostly economics: <http://www.dreamscape.com/rvien/#PublicationsForFun>
r c
v s a Whether strength of body or of mind, or wisdom, or
i m p virtue, are found in proportion to the power or wealth
e a e of a man is a question fit perhaps to be discussed by
n e . slaves in the hearing of their masters, but highly
@ r c m unbecoming to reasonable and free men in search of
d o the truth. -- Rousseau
.

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