Price elasticity of demand measures:
A)the responsiveness of the quantity demanded of a good to a change in income.
B)the responsiveness of the quantity demanded of a good to a change in consumers' preferences.
C)the responsiveness of the quantity demanded of a good to a change in price.
D)the reduction in the quantity demanded of a good when the price is reduced.

Question

Quizplus · Accepted Answer

Price elasticity of demand measures how much the quantity demanded of a good changes in response to changes in its price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price. Therefore, it is unrelated to changes in income or consumer preferences, and it does not refer to a specific amount of reduction in quantity demanded.

Price Elasticity of Demand Measures