Price elasticity of demand shows
A) that income is a function of demand.
B) the degree of consumer sensitivity to price changes.
C) shifts in demand in response to changes in consumer preferences.
D) the extent to which a demand schedule changes in response to changes in consumer income and taste.
E) that consumers are usually indifferent to changes in price.

Question

Quizplus · Accepted Answer

Price elasticity of demand measures the degree of responsiveness or sensitivity of consumers to changes in the price of a good or service. Specifically, it measures the percentage change in quantity demanded in response to a percentage change in price. Therefore, option (B) is the correct answer.

Price Elasticity of Demand Shows