I do not agree with this statement.

This is because Price elasticity of demand can be measured by using geometric method.

Point Elasticity Method or Geometric Method

The proportional method and total outlay method enable us to measure elasticity of demand at a given point on the demand curve. Therefore, Dr. Marshall has developed yet another method to measure elasticity of demand, which is known as Point or Geometric method. At any point on demand curve elasticity of demand is measured with the use of the following formula.

With the help of the following example, we can understand how to measure elasticity of demand at a point on, linear demand curve.

Linear Demand Curve

In the above figure DD is, demand curve and we assume that its length is 6 cm. At Point P, demand is infinite elastic, whereas at point P4 elasticity of demand is zero. Therefore, we have to measure elasticity of demand on points, P1, P2 and P3

At point P1, elasticity of demand = lower segment of the demand curve below the given point P2 P4 ÷ Upper segment of the demand curve above the point is P1 P. Therefore, Ed = P1 P4 ÷ P1P. Ed>1. It means demand is elastic or elasticity of demand is greater than one at point.

Similarly, by using the above given formula, we can measure elasticity of demand at point P2 and P3. At point P2 , demand is unitary elastic. It means elasticity of demand is equal to one whereas at point P3 demand is less than one.

Non-Linear Demand Curve

If the demand curve is non-linear, then a tangent is, drawn to the demand curve at the given point. The tangent should touch both the axes - OX axis and OY axis. The price elasticity is measured by the ratio of lower segment to the upper segment.

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