Dividing the percentage change in quantity demanded by the percentage change in price gives the
A) prestige demand curve.
B) breakeven point.
C) marginal cost curve.
D) price sensitivity curve.
E) price elasticity of demand.

Question

Quizplus · Accepted Answer

Dividing the percentage change in quantity demanded by the percentage change in price gives the formula for price elasticity of demand. This measures the responsiveness of consumers to a change in price and is useful for businesses in determining optimal pricing strategies.

Dividing the Percentage Change in Quantity Demanded by the Percentage