The statement that the price elasticity of demand coefficient is, technically, always negative, but for convenience economists ignore the minus sign is true. The price elasticity of demand is a measure of the responsiveness of the quantity demanded of a good to a change in its price. It is defined as the percentage change in the quantity demanded of a good in response to a one percent change in its price. Economists use the price elasticity of demand coefficient to quantify the degree of responsiveness in the quantity demanded of the good to its price level. As a result, the coefficient is always negative because the demand for a good typically decreases as its price level increases. However, for convenience economists often ignore the minus sign when referring to the coefficient.

## What is Price Elasticity of Demand?

Price elasticity of demand is an economic measure of the degree to which the quantity of a good or service demanded is affected by a change in its price. It is calculated as the percentage change in the quantity demanded of a good in response to a one percent change in its price. The price elasticity of demand coefficient is typically negative, as the demand for a good typically decreases as its price level increases.

## Why is the Price Elasticity of Demand Coefficient Negative?

The price elasticity of demand coefficient is always negative because the demand for a good typically decreases as its price level increases. This is due to the fact that when the price of a good increases, consumers tend to substitute cheaper alternative goods and services in place of the more expensive good. This in turn causes the quantity demanded of the good to decrease.

## Why Do Economists Ignore the Minus Sign?

For convenience, economists often ignore the minus sign when referring to the price elasticity of demand coefficient. This is because the coefficient is always negative and it does not provide any additional information. It is also easier to compare the responsiveness of the demand for different goods and services in terms of their price elasticity of demand when the minus sign is omitted.

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