Which of the following best explains 'price elasticity'?
A) Discount is based on a special offer to temporarily stimulate sales.
B) Discount is based on orders placed out of season for delivery later in the year.
C) Discount is based on the how fast the customer pays their bills.
D) The extent to which price per unit changes with the volume that is purchased.

Question

Which of the following best explains 'price elasticity'? 
A) Discount is based on a special offer to temporarily stimulate sales. 
B) Discount is based on orders placed out of season for delivery later in the year. 
C) Discount is based on the how fast the customer pays their bills. 
D) The extent to which price per unit changes with the volume that is purchased.

Quizplus · Accepted Answer

Price elasticity refers to the relationship between the quantity of a product demanded and the product's price. Specifically, it describes the degree to which demand for a product changes in response to a change in price. The measure of price elasticity takes into consideration the percentage change in price relative to the percentage change in quantity demanded. Therefore, D is the best explanation.

Which of the Following Best Explains 'Price Elasticity