The price elasticity of demand can be found by:
A)examining only the slope of the demand curve.
B)measuring absolute changes in price and quantity demanded.
C)comparing the percentage change in quantity demanded to the percentage change in price.
D)knowing that when price changes,quantity demanded goes in the opposite direction.

Question

Quizplus · Accepted Answer

Price elasticity of demand is defined as the percentage change in quantity demanded over the percentage change in price. Therefore, to find the price elasticity of demand, we need to compare the percentage change in quantity demanded to the percentage change in price. Option A is incorrect because examining only the slope of the demand curve does not provide information on the responsiveness of quantity demanded to price changes. Option B is incorrect because measuring absolute changes in price and quantity demanded ignores the impact of the initial quantity demanded and price levels. Option D is incorrect because it only describes the law of demand, which states that an increase in price leads to a decrease in quantity demanded, and vice versa, but it does not help in finding the price elasticity of demand.

The Price Elasticity of Demand Can Be Found By