Which of the following is true with respect to the price elasticity of demand?
A) The coefficient will change with changes in the units of measurement (for instance, going from pounds to ounces).
B) Elasticity of demand can be measured by the slope of the demand curve.
C) Elasticity measures the sensitivity of total expenditure to a change in price.
D) Elasticity will tend to be greater for a relatively expensive product than for a less expensive one.
E) A coefficient of -1 means that the percentage change in total expenditure is equivalent to the percentage change in price.

Question

Quizplus · Accepted Answer

Elasticity tends to be greater for more expensive products because consumers are more sensitive to price changes when the item takes up a larger portion of their budget.

Which of the Following Is True with Respect to the Price