The price elasticity of demand measures
A) changes in demand.
B) how responsive producers are to a change in demand.
C) how responsive consumers are to a change in price.
D) how responsive consumers are to a change in income.

Question

Quizplus · Accepted Answer

Price elasticity of demand measures how consumers react to the change in price of a good or service. It measures the responsiveness of the quantity demanded to a change in price. Thus, option C is the correct choice. Option A refers to changes in demand while option B refers to how producers react to changes in demand. Option D is about how responsive consumers are to a change in income, which is measured by income elasticity of demand.

The Price Elasticity of Demand Measures