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The coefficient of the price elasticity of demand is computed as the absolute value of the percentage change in quantity demanded divided by:

A. The change in price

B. The change in supply

C. The percentage change in supply

D. The percentage change in price

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Correct Answer : D.


Price elasticity of demand (PED) is a measure of responsiveness of the quantity of a good demanded to changes in its price. The formula for the coefficient of price elasticity of demand for a good is Ed = % change in quantity demanded % change in price

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