The less sensitive buyers are to a change in price, the
A) greater a change in price must be to induce a certain change in quantity demanded.
B) smaller is the price elasticity of demand.
C) greater the price elasticity of demand.
D) closer the price elasticity of demand is to one.

Question

Quizplus · Accepted Answer

Price elasticity of demand measures the responsiveness of quantity demanded to a change in price. When buyers are less sensitive to a change in price, it means that their quantity demanded does not change much in response to a change in price. Hence, the price elasticity of demand is smaller indicating that a smaller change in price will cause a certain change in quantity demanded.

The Less Sensitive Buyers Are to a Change in Price