Assuming the law of demand holds for a good, its price elasticity of demand is:
A) positive.
B) greater than 1.
C) equal to 1.
D) negative.

Question

Quizplus · Accepted Answer

The law of demand states that as the price of a good increases, the quantity demanded decreases, and vice versa. Therefore, the price elasticity of demand is measured as the percentage change in quantity demanded divided by the percentage change in price. Since as the price increases, the quantity demanded decreases, the elasticity is negative.

Assuming the Law of Demand Holds for a Good, Its