Define the price elasticity of demand and show how it is calculated The price elasticity of demand is a units -free measure of the responsiveness of __ A. the demand for a good when the price of one of it substitutes or a complement of it changes B. the quantity demanded of a good to a change in its price when all other influences on buying plans remain the same C. the demand for a good when consumers income changes D. the quantity demanded of a good to a change in the quantity supplied when all other influences on buying,plans remain the same

Question

Define the price elasticity of demand and show how it is calculated The price elasticity of demand is a units -free measure of the responsiveness of __ A. the demand for a good when the price of one of it substitutes or a complement of it changes B. the quantity demanded of a good to a change in its price when all other influences on buying plans remain the same C. the demand for a good when consumers income changes D. the quantity demanded of a good to a change in the quantity supplied when all other influences on buying,plans remain the same

Answer 1

The price elasticity of demand is a units-free measure of the responsiveness of the quantity demanded of a good to a change in its price, when all other influences on buying plans remain the same.The correct answer is B. The price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. It is a measure of how much the quantity demanded of a good responds to a change in its price. A higher absolute value of the price elasticity of demand indicates a greater responsiveness of quantity demanded to changes in price.

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