Question

Economists use elasticity to measure the responsiveness of quantity to a change in price rather than the slope of the demand curve because elasticity is

A.

always negative whereas the slope is always positive.

B.

independent of the units of measurement.

C.

harder to calculate.

D.

dependent on the units of measurement.

E.

easier to calculate.

Answer 1

Elasticity of demand measures the response of change in quantity demanded due to change in price.

Elasticity does not take into account absolute values.

It takes into account percentage change in the quantity demanded and price.

This makes elasticity independent of the units of measurement.

On the other hand, slope takes into account absolute value of change in quantity demanded and price and does not indicate responsiveness in correct manner.

So,

Economists use elasticity as it is independent of the units of measurement.

Hence, the correct answer is the option (B).