Why is the price elasticity of demand a relative measure

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Why is the price elasticity of demand a relative measure? That is, why is elasticity measured in percentage terms rather than absolute terms? 1. So the coeffecient of elasticity will not be dependent on the physical units of the good. 2. because the absolute price or quantity demanded of a product is irrelevant to the elasticity measure 3. so the coeffecient of elasticity will not be negative 4. because absolute measure do not account for the direction of the change in quantity.

Reference no: EM13770726

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