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

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.<br /><br />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.