If price changes are large, it is best to use:

Question

Quizplus · Accepted Answer

When price changes are large or extreme, the arc elasticity of demand is the best measure to use. This elasticity method takes into account the average of the starting and ending prices, which is important because if the starting price is very high and the ending price is very low, the percentage change in quantity demanded will be very different compared to if the starting price was very low and the ending price was very high. The arc elasticity also avoids the problem of using two different price elasticities for the same good.

If Price Changes Are Large, It Is Best to Use