A vital feature of elasticity is the it is a unit-free measure. Suppose we room considering the price-elasticity of demand for apples i m sorry is $\frac\triangley/y\trianglex/x$ whereby $y$ is amount demanded and also $x$ is price. The elasticity will be the very same whether apples are measured in pounds (lb) or kilograms (kg) since both $\triangle y$ and also $y$ will certainly be in the same units. An in similar way it will certainly not issue in which currency price is measured, since $\triangle x$ and $x$ will be in the same money units. This provides comparisons of elasticities, between goods measured in different units, or in between countries with various currencies, much much more meaningful 보다 comparisons that slopes.
The factor why elasticity is not characterized as the steep of the graph is since the idea of steep is mathematically different from elasticity.
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When we calculate slope we use the formula $\triangley/\trianglex$ but in the situation of elasticity we usage $\frac\triangley/y\trianglex/x$ i m sorry is the percent change in $y$ divided by percent change in $x$ i beg your pardon is no the same as the formula because that slope.
$\triangley/\trianglex \ne \frac\triangley/y\trianglex/x$
Hope this helps.
Elasticities tell economic experts how responsive transforms in price space to transforms in quantity, and this is useful since it speak you even if it is revenue will rise or decrease. Suppose you are the owner if a firm that is interested in expanding. It will certainly be more informative because that you to understand that if you expand your production by 20%, the price of your assets will to decrease by only 10% than to understand that if you develop two more units every week, the price will drop by $1.00. The very first description is informative since it speak you whether her revenue will boost or no (in this instance it will, because demand is price elastic), conversely, the 2nd is one absolute reference which requires additional calculation in stimulate to recognize what it method for her business.
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