Price elasticity is measured by:
A) dividing relative changes in the quantity sold by the relative changes in price.
B) multiplying the price of a unit product with the number of units sold.
C) dividing the number of units produced by the number of units sold.
D) adding the relative changes in price to the rate-of-return per product unit.

Question

Quizplus · Accepted Answer

Price elasticity is determined by dividing the percentage change in the quantity sold of a product by the percentage change in price of that product. This helps to measure the sensitivity of consumer demand to changes in price. Therefore, the correct choice is A.

Price Elasticity Is Measured By