Price elasticity of demand refers to the ratio of the:
A) percentage change in price of a good in response to a percentage change in quantity demanded.
B) percentage change in price of a good to a percentage increase in income.
C) percentage change in the quantity demanded of a good to a percentage change in its price.
D) none of these.

Question

Quizplus · Accepted Answer

Price elasticity of demand measures the responsiveness of quantity demanded of a good to a change in its price. It is calculated by dividing the percentage change in the quantity demanded of a good by the percentage change in its price. Therefore, option C is the correct answer.

Price Elasticity of Demand Refers to the Ratio of The