Which of the following is a measure of customers' sensitivity to changes in price?
A) liquidity ratio
B) break-even point
C) price elasticity of demand
D) marginal analysis
E) basing-point

Question

Quizplus · Accepted Answer

Price elasticity of demand measures how responsive customers are to changes in price. It is calculated by dividing the percentage change in quantity demanded by the percentage change in price. A high price elasticity of demand means that customers are very sensitive to price changes and will reduce their demand significantly if prices increase.

Which of the Following Is a Measure of Customers' Sensitivity