Price elasticity of demand measures:
A) the change in price brought about by a change in consumer demand.
B) how consumers change their purchases in response to a change in income.
C) how consumers change their purchases in response to a change in the price of a substitute good.
D) how consumers change their purchases in response to a change in the price of a product.

Question

Quizplus · Accepted Answer

Price elasticity of demand measures how responsive consumers are to a change in the price of a product. It is calculated by dividing the percentage change in quantity demanded by the percentage change in price. It helps businesses understand how much they can increase or decrease their prices without significantly affecting demand for their product.

Price Elasticity of Demand Measures