Elasticity measures _____
A)the ability of a firm to introduce new products.
B)the strength of an economy's tendency to recover from recession.
C)the responsiveness of decision makers to changes in price, income, and other variables.
D)the profitability of investment in an industry.
E)the long-run price trends in an economy.

Question

Quizplus · Accepted Answer

Elasticity measures the responsiveness of decision makers to changes in price, income, and other variables. It can help businesses determine how much to change their pricing based on consumer demand and income levels. It also helps policymakers understand how changes in taxes, subsidies, and regulations affect the behavior of consumers and producers.

Elasticity Measures _____