The percentage change in quantity demanded of one good or service divided by the percentage change in the price of a related good or service is the _____ of demand.
A)price elasticity
B)quantity elasticity
C)income elasticity
D)cross-price elasticity

Question

Quizplus · Accepted Answer

The percentage change in the quantity demanded of one good in response to a change in the price of a related good is measured by the cross-price elasticity of demand. This is because the cross-price elasticity of demand measures how sensitive the demand for one good is to a change in the price of a related good.

The Percentage Change in Quantity Demanded of One Good or Service