Q86
When price elasticity of demand for normal goods is calculated, the value is always
A.
Positive
B.
Negative
AnswerC.
Constant
D.
Greater than 1
Answer: Option B
Solution
Answer: Option B
Solution:
When price elasticity of demand for normal goods is calculated, the value is always Negative. The PED is the percentage change in quantity demanded in response to a one percent change in price. The PED coefficient is usually negative, although economists often ignore the sign. Demand for a good is relatively inelastic if the PED coefficient is less than one (in absolute value).