The price elasticity of demand is typically expressed as a positive number because: Group of answer choices 1.price and quantity move in the same direction. 2.the demand curve has a positive slope. 3.it's convenient to use absolute values. 4.both the numerator and the denominator are negative, so the formula yields a positive number.
Question
The price elasticity of demand is typically expressed as a positive number because: Group of answer choices
1.price and quantity move in the same direction.
2.the demand curve has a positive slope.
3.it's convenient to use absolute values.
4.both the numerator and the denominator are negative, so the formula yields a positive number.
Solution
The price elasticity of demand is typically expressed as a positive number because:
- it's convenient to use absolute values.
Explanation: The price elasticity of demand is usually negative, since price and quantity demanded usually move in opposite directions (when price goes up, quantity demanded goes down and vice versa). However, economists often take the absolute value of this number to avoid dealing with negative numbers, making it easier to compare elasticities of different goods. Therefore, it's more about convenience and standard practice than anything inherent in the concept of elasticity itself.
Similar Questions
The type of elasticity of demand that is most commonly positively valued but that can be negative at timesis calledA) income elasticity of demand and it is negative when the good is a normal good.B) income elasticity of demand and it is negative when the good is an inferior good.C) price elasticity of demand and it is negative when the slope of the demand curve is negativelysloped.D) None of the above
The price elasticity of demand is defined as the percentage change in the price of that good divided by the percentage change in quantity demanded for that good.Question 1AnswerTrueFalse
Most economists report the elasticity of demand asa.a percentage, since both the numerator and denominator are percentages.b.a negative number, since price and quantity demanded move in opposite directions.c.the absolute value of the actual number.d.a dollar amount, since we are measuring the change in price.
Suppose the value of the price elasticity of demand is -3. What does this mean?Group of answer choicesA 1 per cent increase in the price of the good causes quantity demanded to increase by 3 per cent.A $1 increase in price causes quantity demanded to fall by 3 units.A 3 per cent increase in the price of the good causes quantity demanded to decrease by 1 per cent.A 1 per cent increase in the price of the good causes quantity demanded to decrease by 3 per cent.
If the quantity demanded of a good is sensitive to a change in the price of that good, demand is said to be elastic.Question 5AnswerTrueFalse
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