How does price elasticity of demand appear when calculated?
A) It is always a negative number, although it is sometimes reported as an absolute value.
B) It is sometimes a negative number and sometimes a positive number, depending on the magnitude of response.
C) It is always a positive number because price and quantity are directly related in terms of demand.
D) It can be a positive number or a negative number, but is always reported as an absolute value.

Question

Quizplus · Accepted Answer

Price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Since an increase in price typically leads to a decrease in quantity demanded (and vice versa), the elasticity is usually negative. However, it is often reported as an absolute value to focus on the magnitude of the response rather than the direction.

How Does Price Elasticity of Demand Appear When Calculated