Price elasticity depends upon the magnitude and direction of the contemplated price change.

Question

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Price elasticity is a measure of the responsiveness of demand for a product to a change in its price. The magnitude of the price change and the direction of the price change both affect the price elasticity. For example, a small increase in price may not significantly reduce demand, while a large increase in price may greatly reduce demand, resulting in a different price elasticity. Similarly, an increase in price may cause demand to fall, while a decrease in price may increase demand, resulting in a different price elasticity.

Price Elasticity Depends Upon the Magnitude and Direction of the Contemplated