 # Price elasticity of demand

The text notes that for price elasticity (and not for cross elasticity) that it is common practice to state the price elasticity of demand as a positive number. However when going through Qbank, they are saying the correct answer has a negative sign. Has anyone else noticed this? How will they mark it on the exam? Do they want it as an absolute value or do they want the negative relationship expressed in the answer? Here’s an example of a question like those i found in Qbank: If the price of a candy bar increases from \$0.50 to \$0.55 and the quantity demanded decreases from 267 to 235, the price elasticity of demand is: Price elasticity of demand is calculated by dividing the percent change in quantity demanded by the percent change in price, using the average value of the variable in the computations. The percent change in quantity demanded is (235 - 267) / [(235 + 267) / 2] = -32/251 = -0.127 or -12.7%. The percent change in price is = (0.55 - 0.50) / [(0.55 + 0.50) / 2] = 0.05 / 0.525 = .095 or 9.5%. The price elasticity of demand is -12.7 / 9.5 = -1.34

the computations will always yield a negative numbers since all rational markets face a downward sloping demand curve, and by convention when an economist is talking about price elasticities an ABS value is commonly used. Typically though exam questions will have either all + or all - numbers and you should focus on calculating the correct number (this ofcourse is not true for cross elasticity questions where the sign is meaningful).

so i don’t have to worry that the exam will have the same answer in both positive and negative? And if it did, which would i answer?