So it measure of flexibility, which is according to percentage alter in line with the average really worth of any variable ranging from two issues, is known as arch flexibility . The arch flexibility approach contains the virtue it efficiency the newest exact same suppleness whether i go from part A towards point B or out-of point B to suggest A beneficial. Simple fact is that method we’re going to use to calculate suppleness.
Making use of the average quantity and you will average price in order to estimate commission change, the latest arch flexibility approach stops the necessity to indicate new direction of your own alter and you may, and so, provides a comparable respond to whether i move from A to B or of B to Good
Towards arch elasticity method, we estimate the cost flexibility from demand making use of the mediocre worth regarding price, $$ \pub