Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P x . Assume that P = $8, I = 200, and P x = $10.
-Since demand curves are mostly downward sloping, economists tend to ignore the negative sign when calculating the price elasticity of demand.

Question

Quizplus · Accepted Answer

The demand curve is downward sloping, so the price elasticity of demand is negative. However, economists typically ignore the negative sign when calculating the price elasticity of demand.

Scenario 5.1 The Demand for Noodles Is Given by the Following Equation