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A price rise from $10 to $15 constitutes a 50 percent change if the original price ($10) is used in figuring the percentage ($5/$10), or a 33 percent change if the price after the change ($15) is used ($5/$15). For small changes, the distinction is not important, but for large changes, it is. To avoid this confusion, economists use what technique?

A price rise from $10 to $15 constitutes a 50 percent change if the original price ($10) is used in figuring the percentage ($5/$10), or a 33 percent change if the price after the change ($15) is used ($5/$15). For small changes, the distinction is not important, but for large changes, it is. To avoid this confusion, economists use what technique?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A price rise from $10 to $15 constitutes a 50 percent change if the original price ($10) is used in
figuring the percentage ($5/$10), or a 33 percent change if the price after the change ($15) is used
($5/$15). For small changes, the distinction is not important, but for large changes, it is. To avoid this
confusion, economists use what technique?

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Step 1

In the mentioned question technique is being asked which help to avoid the difference in calculating the percentage of the price.

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