The price elasticity of demand for a good measures the willingness of
A) consumers to buy less of 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. A higher price elasticity of demand means that consumers are more willing to buy less of the good as the price increases. Therefore, choice A is the correct answer. Choice B is not related to the concept of price elasticity of demand. Choice C describes the supply curve, not demand. Choice D is also not related to the concept of price elasticity of demand.

The Price Elasticity of Demand for a Good Measures the Willingness