The absolute price elasticity of demand for good A is 1.2 when price is measured in dollars. If price were measured in cents, the price elasticity elasticity of demand would equal
A) 1200.
B) 12.
C) 1.2.
D) 0.8.

Question

Quizplus · Accepted Answer

The price elasticity of demand is unitless because it is a ratio of percentage changes. Changing the unit of measurement for price (from dollars to cents) does not affect the calculated elasticity value.

The Absolute Price Elasticity of Demand for Good a Is