How much the demand for one good changes in response to a change in the price of a different good is measured by:
A) price elasticity of supply.
B) price elasticity of demand.
C) income elasticity of demand.
D) cross-price elasticity of demand.

Question

Quizplus · Accepted Answer

The measurement of how much the demand for one good changes in response to a change in the price of another good is called cross-price elasticity of demand. Therefore, the correct answer is D. Price elasticity of supply measures the responsiveness of the quantity supplied of a good to a change in its price. Price elasticity of demand measures the responsiveness of the quantity demanded of a good to a change in its price. Income elasticity of demand measures the responsiveness of the quantity demanded of a good to a change in income.

How Much the Demand for One Good Changes in Response