The percentage change in the quantity demanded of a good due to a percentage change in its price is referred to as ________.
A) the cross-price elasticity of demand
B) the price elasticity of demand
C) the income elasticity of demand
D) consumer surplus

Question

Quizplus · Accepted Answer

The situation described in the question refers to the concept of price elasticity of demand, which measures the responsiveness of quantity demanded to a change in price. Cross-price elasticity of demand measures the change in demand for one good due to a change in the price of a related good, while income elasticity of demand measures the change in demand for a good due to a change in income. Consumer surplus is the difference between the maximum price a consumer is willing to pay for a good and the actual price they pay.

The Percentage Change in the Quantity Demanded of a Good