Elasticity improves our understanding of supply and demand by adding
A)measures of equity.
B)measures of efficiency.
C)a quantitative element to our analysis.
D)a qualitative element to our analysis.

Question

Quizplus · Accepted Answer

Elasticity adds a quantitative element to our analysis by measuring the responsiveness of demand or supply to changes in price or other factors. It helps us understand the degree of sensitivity of buyers and sellers to changes in price, income, or other variables, which can inform pricing, production, and investment decisions. Measures of equity or efficiency are not directly related to elasticity, although they may be relevant to broader economic issues such as income distribution or resource allocation. Qualitative elements, such as subjective preferences or cultural factors, are also not directly captured by elasticity measures.

Elasticity Improves Our Understanding of Supply and Demand by Adding