Answer to Question #225664 in Microeconomics for Hego

Question #225664

Which one of the following statements is incorrect?
A. The price elasticity of demand is expressed as a ratio which is known as the elasticity coefficient.
B. When calculating the price elasticity of demand, one has to take the absolute value of the result.
C. If there are large fluctuations in price, the arc elasticity formula should be utilised.
D. If the elasticity coefficient is calculated at a particular point on the demand curve, it is called the arc elasticity.

Expert's answer

A. The price elasticity of demand is expressed as a ratio which is known as the elasticity coefficient.