Price Elasticity of Demand Question

[soxboys21]

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Edited 2 time(s). Last edit at Sunday, June 8, 2008 at 08:06PM by soxboys21.

 

[cpk123]

price elasticity of demand has no sign doesn't it...

it is the income elasticity, and cross elasticity that sign matters.

so D would be the answer for the above question.

 

[da0618]

Yeah this questions was worded very oddly, but the % change in price is absolute...so it's not negative (or so I think).

 

[topher]

we're not allowed to discuss the questions....

i have about 50 questions i took notes on but i can't post it here

 

[jk86]

Agree...no sign and it was 1.19

 

[soxboys21]

I'd have to go back through the books and stuff and maybe I missed it, but I could have sworn there were (-) and (+).

Dang, oh well! Nothing I can do now!

 

[da0618]

No one else thinks it was worded oddly? It said something like here's the current demand (P1)...last year they decreased the price...(P0)?

 

[jk86]

+/- was only for cross elasticity from what i recall

 

[soxboys21]

jk86 Wrote:
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> +/- was only for cross elasticity from what i
> recall

If that's the case, then so be it, and I can sleep better tonight!

I guess I'll have to look that up in the CFAI materials the next couple of days!

Sucks to miss an easy point...

 

[BlackDog]

I remember that CFAI books says that there is no sign for the price elasticity of demand, however, there is always sign in the Q-bank questions.

My memory might be fading right now, and I just don't want to re-visit the book right now.

 

[soxboys21]

BlackDog Wrote:
-------------------------------------------------------
> I remember that CFAI books says that there is no
> sign for the price elasticity of demand, however,
> there is always sign in the Q-bank questions.
>
> My memory might be fading right now, and I just
> don't want to re-visit the book right now.

That's what I thought! I just checked the CFAI material, and it mentions the absolute value and ignores the sign; HOWEVER, I remember Q-Bank and Schweser using the (-) sign...