We use percentage changes in the formula for estimating the price elasticity of demand coefficient in order to
A)make the coefficient's value become independent of whether price goes up or down.
B)take the midpoints of P and of Q in the computation.
C)eliminate the negative sign of the coefficient.
D)make it irrelevant how we measure price: be it in cents, in dollars, or in thousands of dollars.

Question

Quizplus · Accepted Answer

Using percentage changes makes the elasticity coefficient a unit-free measure, meaning it does not depend on the units in which price or quantity are measured.

We Use Percentage Changes in the Formula for Estimating the Price