Price elasticity of demand measures
A)how responsive suppliers are to price changes.
B)how responsive sales are to changes in the price of a related good.
C)how responsive quantity demanded is to a change in price.
D)how responsive sales are to a change in buyers' incomes.

Question

Quizplus · Accepted Answer

Price elasticity of demand measures the responsiveness of the quantity demanded to a change in the price of a good or service. It indicates how sensitive consumers are to changes in price and helps businesses to understand how much they can increase or decrease the price before it significantly affects sales. Answer A is incorrect because it refers to the elasticity of supply, which measures how responsive producers are to changes in price. Answer B is incorrect because it relates to the cross-price elasticity of demand, which measures the responsiveness of demand for one good to a change in the price of another related good. Answer D is incorrect because it refers to the income elasticity of demand, which measures how responsive demand is to changes in buyers' incomes.

Price Elasticity of Demand Measures