For most consumer goods, the price elasticity of demand is
A) negative only when price decreases.
B) negative regardless of the direction of the price change.
C) positive only when price decreases.
D) positive regardless of the direction of the price change.

Question

Quizplus · Accepted Answer

The price elasticity of demand measures the responsiveness of the quantity demanded to a change in price. A negative value for price elasticity indicates an inverse relationship between price and quantity demanded, meaning that as price increases, quantity demanded decreases and vice versa. Therefore, the price elasticity of demand is always negative.

For Most Consumer Goods, the Price Elasticity of Demand Is