Hi, I have struggled to understand the diagram especially in the second part b , what is exactly the CED graph please explain and how does the B affects the shape of the graph, explain the theory please, thanks !..

* Q26. For each of the following demand curves, find the price elasticity of demand as a function of Q & P. a. QD = a -bp This is a standard linear demand curve. Price elasticity of demand here is &D = dp Q P -bp a-bp a_bp ; we can see that when P = 0, ED = 0, and as P - a/b, ED - 00. Graphed below are standard demand curves for a = 4 (both) and b = 1 (green) and b = 2 (orange). -3 b. QD = ap-B This is a special demand curve: the constant elasticity of demand curve. This turns out to be a very good name for the function, as we shall soon see. Price elasticity of demand here is ED = ag- = (-Bap-6-1) (ap-B) = (-B) (ap-B) = -B. The elasticity is constant at - B no matter what price we're at. Graphed below are CED curves for a = 1 (both) and B = 1 (red) and B = 2 (blue)