Question

Is the demand curve shallow or steep? What does this mean about the elasticity of the demand for memberships?

Answer 1

A shallow demand curve indicates an elastic demand for memberships, where consumers are sensitive to price changes. Elasticity, which should not be confused with slope, refers to how much the quantity demanded changes in response to a change in price.

Step-by-step explanation:

The steepness of a demand curve represents the elasticity of demand. A shallow demand curve indicates that the demand is elastic; consumers are sensitive to changes in price, meaning that small changes in price result in large changes in quantity demanded. Contrastingly, a steep demand curve suggests that the demand is inelastic; consumers are not very responsive to price changes, rendering small changes in price to result in relatively small changes in quantity demanded. Thus, if the demand curve for memberships is shallow, it means that the demand for memberships is elastic.

It's important not to confuse the slope of the demand curve with its elasticity. Slope refers to the rate of change in units along the curve, while elasticity refers to the percentage change in quantity demanded in response to a change in price. The elasticity changes along the demand curve even if the slope remains constant.

Answer 2

The demand curve is shallow, which means the elasticity of the demand for memberships is inelastic.

Step-by-step explanation:

Among goods with more elastic demand, and for those with lower demand, the demand curve becomes shallower (closer to horizontal) and steefer (closer to vertical). A new demand curve will be drawn if there is an unforeseen factor of quality or quantity.

It is recognized in economics as a ' demand elasticity ' –how open customers are to shifts in costs. By general, if demand is elastic, a price decrease would increase consumer spending with the percent increase by supply more than the percentage decline in costs. The price increase will occur according to the aforementioned parameters.

Nevertheless, Rick Caro, ceo of Management Vision, a New York city health club, argues that the items are not simply facilities such as memberships of health clubs.