Why will the coefficient for the price elasticity of demand always be a negative number?
Question: Why will the coefficient for the price elasticity of demand always be a negative number?
Because there is a negative relationship between price and demand for a commodity, the coefficient of price elasticity of demand is always negative. Because the nature of the commodity – The nature of the commodity affects the elasticity of demand. The demand for the goods of essential necessity is inelastic whereas the demand for the goods of comfortable necessity is elastic. The demand for luxury goods is more elastic. essential goods; For example, the demand for cereals, salt, etc. does not change much due to price change, whereas the demand for luxury goods changes a lot. The demand for goods of comfortable necessity often changes proportionately.
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