The reason for the use of the "averaging equation" to compute the price elasticity ofdemand is that
A) it would be impossible to connect a change in price specifically to a change inquantity demanded otherwise
B) the elasticity within a price range differs depending on whether you are measuringprice increases or decreases
C) otherwise, the answer is sometimes negative and sometimes positive
D) it measure sensitivity to price changes more accurately
E) economists find the average elasticity to be a useful tool in their research

Question

Quizplus · Accepted Answer

The averaging equation, or midpoint method, is used because elasticity can differ depending on whether price is increasing or decreasing, providing a consistent measure regardless of direction.

The Reason for the Use of the "Averaging Equation" to Compute