Question

The price elasticity of demand is often turned into a positive number to:

a) Correct for the calculation error.
b) Identify whether the demand is elastic, inelastic, or unit-elastic.
c) See the relative size.
d) See how it compares to other elasticities.

Answer 1

The price elasticity of demand is often turned into a positive number to identify whether the demand is elastic, inelastic, or unit-elastic.

Step-by-step explanation:

The price elasticity of demand is often turned into a positive number to identify whether the demand is elastic, inelastic, or unit-elastic. When the price elasticity of demand is greater than one, it indicates elastic demand, meaning that the quantity demanded is highly responsive to changes in price. Elasticities that are less than one indicate inelastic demand, where the quantity demanded is not very responsive to price changes. Unitary elasticities indicate proportional responsiveness of demand to price changes.