A geometric interpretation of elasticity is as follows. Consider the tangent line to the demand curve q = ƒ(p) at the point P₀ = (P₀, q₀). Let the point where the tangent line inter-
sects the p-axis be called A, and the point where it intersects the
q-axis be called B. Let P₀A and P₀B be the distances from P₀ to
A and to B, respectively. Calculate the ratio P₀B/P₀A in terms of
P₀, d₀, and f'(p₀), and show that this ratio equals the elasticity.