Why is the price elasticity of demand generally a negative number?
What will be an ideal response?
The law of demand says that an increase in the price of a product will lead to a decrease in quantity demanded. Thus, price and quantity demanded are inversely related to one another. This means that if either the numerator or the denominator of the ratio is positive, the other will be negative.
You might also like to view...
Which is the most accurate statement?
A. We have never had corporate corruption until around the year 2000. B. If you asked the average American if he believed all corporate officers were honest, he would answer "Yes." C. Enron is the only large corporation that was caught up in a financial scandal since the 1980s. D. Although it may be years before we know the full damages incurred, it seems very likely that the corporate financial scandals of recent years will end up costing those corporations and the public billions of dollars.
Asset price inflation occurs when the prices of assets rise.
Answer the following statement true (T) or false (F)