Why, when we calculate the price elasticity of demand, do we express the change in price as a percentage of the average price and the change in quantity as a percentage of the average quantity?
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Write My Essay For MeWhy, when we calculate the price elasticity of demand, do we express the change in price as a percentage of the average price and the change in quantity as a percentage of the average quantity?
According to Pendzialek et al. (2016), price elasticity of demand is a units-free measure of the actual responsiveness of the quantity needed of the goods for price change when all other aspects that influence its buying plans are constant. Price elasticity of demand equals the absolute value of the percentage change ratio in quantity demanded to the percentage change in the price. In this regard, the calculation of the percentage change in price/quantity is measured as the change in price/quantity divided by the average price/quantity…
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