Since it is always a negative number, economists use the convention of taking the absolute value of:
A) income elasticity of demand.
B) cross price elasticity of demand.
C) price elasticity of supply.
D) price elasticity of demand.
E) any elasticity calculation.

Question

Quizplus · Accepted Answer

The convention of taking the absolute value is used for price elasticity of demand because the negative sign indicates an inverse relationship between price and quantity demanded, which is already accounted for in the formula. Taking the absolute value allows for easier comparison of elasticities across different products or markets.

Since It Is Always a Negative Number, Economists Use the Convention