Sensitivity To The Demand Assumption

This graph shows four demand curves between the competitive and monopoly prices.

• The vertical axis is labeled Price.
• The horizontal axis is labeled Quantity.
• The top line curving up on the vertical toward the top of the Price axis, is labeled Isoelastic.
• A second line, under the Isoelastic line and curving slightly less up toward the top of the Price axis is labeled AIDS.
• A third line, curving less again toward the top of the Price axis is labeled Logit.
• The final line, curving the least toward the Price axis, is labeled Linear.
• As quantity decreases, price increases.

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