Elasticity as Relative Slopes: A Graphical Approach to Linking the Concepts of Elasticity and Slope

Price elasticity and the slope of a demand or supply curve are closely related concepts that address the relationship between a price change and the resulting quantity change. At times, however, the link between these two concepts can appear to be counterintuitive, presenting potential pedagogical challenge. We propose a graphical approach by expressing the elasticity as relative slopes, and perform a comprehensive examination of how price elasticity varies along a demand or supply curve, both in linear and nonlinear cases. We suggest that this less well-known technique provides a viable alternative to facilitate better understanding of the seemingly elusive link between elasticity and slope.