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Why do economists use percentages rather than absolute amounts in measuring the responsiveness of consumers to changes in price?
Wiki User
∙ 12y ago
first, if we use absolute changes, the choice of units will arbitrarily affect our impression of buyer responsiveness. exp. measure particular price decline in dollars or pennies.
second, by using percentages, we can correctly compare consumer responsiveness to changes in the prices of different products. we can more sensibly compare the consumer responsiveness to price increases by using some common percentage increase in price for both
Wiki User
∙ 12y ago
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