When a shift in demand or supply occurs, economists can make a quick prediction of the change in price. The denominator of the simple price-change formula is the:
A) multiple of the elasticities of supply and demand.
B) sum of the elasticities of supply and demand.
C) difference between the elasticities of supply and demand.
D) percent change in either demand or supply.

Question

Quizplus · Accepted Answer

The denominator of the simple price-change formula is the sum of the elasticities of supply and demand, which helps determine how much the price will change in response to shifts in demand or supply.

When a Shift in Demand or Supply Occurs, Economists Can