The elasticity of demand measures:
A) the height of the demand curve.
B) how sensitive the quantity demanded is to a change in price.
C) how sensitive the price is to a change in demand.
D) the extent to which demand shifts in response to supply changes.

Question

Quizplus · Accepted Answer

The elasticity of demand measures how sensitive the quantity demanded is to a change in price. It indicates whether a small or large change in price will result in a proportionally larger or smaller change in the quantity demanded. It is calculated as the percentage change in quantity demanded divided by the percentage change in price.

The Elasticity of Demand Measures