Price Elasticity of Demand Measuring Price Elasticity of Demand Percentage Change in Quantity Demanded Percentage Change in Price ● Observations Price elasticity of demand will always be negative (i.e, an inverse relationship between price and quantity o For convenience we drop the negative sign Chapter 4: Elasticity Slide 14MB MC Chapter 4: Elasticity Slide 14 Price Elasticity of Demand ◼ Measuring Price Elasticity of Demand ⚫ Observations ⚫ Price elasticity of demand will always be negative (i.e., an inverse relationship between price and quantity) ⚫ For convenience we drop the negative sign Percentage Change i nPrice Percentage Change i nQuantity Demanded