Price elasticity of demand measures the sensitivity of demand to changes in price.

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Price elasticity of demand is a measure of how much demand for a product or service change in relation to a change in its price, and it reflects the degree of responsiveness of buyers to a change in price. When the price of a good or service increases, the quantity demanded usually decreases, and vice versa. Price elasticity of demand is important for businesses to understand how changes in price affect demand and revenue, and it helps them to set optimal prices that maximize profits.

Price Elasticity of Demand Measures the Sensitivity of Demand to Changes