In general, for price increases or decreases, the price elasticity of demand can be found by:
A)examining only the slope of the demand curve and its position relative to price.
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 a price increases, quantity demanded decreases.

Question

Quizplus · Accepted Answer

The price elasticity of demand is calculated by comparing the percentage change in quantity demanded to the percentage change in price. This calculation considers both the magnitude and direction of the price and quantity changes. Examining only the slope and position of the demand curve would not take into account the actual changes in price and quantity. Measuring absolute changes in price and quantity demanded may not accurately reflect the relative responsiveness of demand to price changes. Knowing that quantity demanded decreases when a price increases is a basic concept, but does not provide a precise measure of elasticity.

In General, for Price Increases or Decreases, the Price Elasticity