Multiple Choice
Why is the price elasticity of demand a relative measure? That is,why is elasticity measured in percentage terms rather than in absolute terms?
A) So the coefficient of elasticity will not be dependent on the physical units of the good.
B) Because absolute measures do not account for the direction of the change in quantity.
C) So that the coefficient of elasticity will not be negative.
D) Because the absolute price or quantity demanded of a product is irrelevant to the elasticity measure.
Correct Answer:
Verified
Correct Answer:
Verified
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