Price elasticity of demand measures:
A)the shift in demand as price changes.
B)the sensitivity of quantity demanded to price.
C)the slope of the demand curve.
D)the relationship of percentages to price.

Question

Quizplus · Accepted Answer

Price elasticity of demand measures the sensitivity or responsiveness of the quantity demanded to changes in price. In other words, it measures how much the quantity demanded changes when the price of a product or service changes. Price elasticity of demand measures the responsiveness or sensitivity of quantity demanded to a change in price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price. A higher elasticity indicates that the demand for the product is more sensitive to price changes.

Price Elasticity of Demand Measures