Linear demand curve
Topic: Consumer Behaviour, Demand and Elasticity · NCERT: Class 12, Ch 2 "Theory of Consumer Behaviour"
Meaning
A linear demand curve is a demand curve that is a straight line: d(p) = a − bp for 0 ≤ p ≤ a/b, and d(p) = 0 for p > a/b. Here a is the quantity bought when the price is zero. Quantity falls by b units for every ₹1 rise in price, and demand becomes zero at p = a/b. With price on the vertical axis, a is the quantity (horizontal) intercept, a/b is the price (vertical) intercept and the slope of the drawn line is −1/b. The line has a constant slope, but its elasticity changes along it. Elasticity is 0 on the quantity axis, 1 at the midpoint and infinite on the price axis.
Example
Take d(p) = 10 − 3p. At p = 0, 10 units are bought. Demand becomes zero at p = 10/3 (about ₹3.33). At p = 5/3, q = 5, which is the midpoint, so price elasticity equals 1 there.
Don't confuse with
- Constant-elasticity curve: a rectangular hyperbola (pq = constant) has elasticity 1 at every point. A straight line does not have constant elasticity.