When economists want to obtain a measure of the responsiveness of quantity demanded to changes in price, they use
A) the slope of the demand curve.
B) the price elasticity of demand.
C) only the percentage change in quantity demanded.
D) the cross-price elasticity of demand.

Question

Quizplus · Accepted Answer

The price elasticity of demand is the measure of the responsiveness of quantity demanded to changes in price. It takes into account both the percentage change in price and the percentage change in quantity demanded. The slope of the demand curve only indicates the direction of the relationship between price and quantity demanded. The percentage change in quantity demanded alone does not provide enough information to measure responsiveness, and cross-price elasticity of demand measures how the demand for one product responds to changes in the price of another product.

When Economists Want to Obtain a Measure of the Responsiveness