Price elasticity of demand describes:
A)the size of the percentage change in the quantity demanded of a good or service when its price changes by one percent.
B)the size of the shift in demand of a good or service when its price changes by one percent.
C)the size of the percentage change in the quantity supplied of a good or service when its demand changes due to a price change.
D)None of these is true.

Question

Quizplus · Accepted Answer

Price elasticity of demand measures the responsiveness of the quantity demanded of a good or service to a change in its price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price. Therefore, option A is the correct answer. Option B refers to the shift in demand due to a change in factors other than price, while option C refers to the elasticity of supply, which is different from the elasticity of demand. Option D is incorrect as option A is true.

Price Elasticity of Demand Describes