The price elasticity of demand can be found by:
A) examining only the slope of the demand curve.
B) measuring absolute changes in price and quantity demanded.
C) examining the relative percentage change in quantity demanded to the relative percentage change in price.
D) knowing that when price changes, the quantity demanded goes in the opposite direction.

Question

Quizplus · Accepted Answer

Price elasticity of demand is calculated by examining the relative percentage change in quantity demanded in response to a relative percentage change in price. It measures the responsiveness of quantity demanded to a change in price. It is not just based on the slope of the demand curve or absolute changes in price and quantity demanded. Also, while it is true that when price changes, the quantity demanded goes in the opposite direction, this statement does not fully capture the concept of price elasticity of demand.

The Price Elasticity of Demand Can Be Found By