The price elasticity of demand for a good measures the willingness of
A)consumers to move away from the good as price rises.
B)consumers to avoid monopolistic markets in favor of competitive markets.
C)firms to produce more of a good as price rises.
D)firms to cater to the tastes of consumers.

Question

Quizplus · Accepted Answer

The price elasticity of demand measures the responsiveness of quantity demanded to changes in price. If the demand for a good is highly elastic, then a small increase in price will cause a large decrease in quantity demanded, meaning that consumers are highly willing to move away from the good as price rises. Therefore, choice A is the best answer. Choices B, C, and D are not related to the concept of price elasticity of demand.

The Price Elasticity of Demand for a Good Measures the Willingness