The price elasticity of demand for good x is defined as: A)percentage change in p_x / percentage change in x. B)percentage change in x /percentage change in p_x. C)percentage change in x/percentage change in income. D)percentage change in x /percentage change in p_y.

Question

Quizplus · Accepted Answer

The price elasticity of demand is defined as the percentage change in quantity demanded of a good or service in response to a percentage change in its price. Therefore, the formula should be percentage change in x (quantity demanded) divided by percentage change in p_x (price of good x).

The Price Elasticity of Demand for Good X Is Defined