Assuming price elasticity of demand is reported as an absolute value, the measured elasticity for an elastic demand would be:
A) greater than one.
B) less than one.
C) exactly one.
D) greater than zero and less than one.

Question

Quizplus · Accepted Answer

The absolute value of the price elasticity of demand measures the degree of responsiveness of quantity demanded to a change in price. An elastic demand is one in which the percentage change in quantity demanded is greater than the percentage change in price, which means that the absolute value of the price elasticity of demand is greater than 1. Therefore, the answer is A) greater than one.

Assuming Price Elasticity of Demand Is Reported as an Absolute