The price elasticity of demand measures
A) the consumers' sensitivity to a price change.
B) the producers' sensitivity to a price change.
C) how much the market supply changes in response to a change in demand.
D) how much the demand changes in response to a change in income.

Question

Quizplus · Accepted Answer

The price elasticity of demand measures how responsive consumers are to a change in price. It reflects the extent to which the quantity demanded changes as the price of a product or service changes. Therefore, A is the correct answer. B is incorrect because producer sensitivity to a price change is measured by price elasticity of supply. C is incorrect because it measures the responsiveness of supply to changes in demand, not demand itself. D is incorrect because the measure that reflects how much demand changes in response to a change in income is income elasticity of demand.

The Price Elasticity of Demand Measures