Question 7
ElasticityPrice elasticity of demand is defined as the
- A.responsiveness of demand to changes in price
- B.responsiveness of price to changes in demand
- C.increase in demand resulting from a rise in price
- D.unit decrease in price resulting from a fall in demand
- E.unit increase in quantity demanded when price rises.
Show the answer and explanation
Answer: A (responsiveness of demand to changes in price)
Explanation
Price elasticity of demand measures how much quantity demanded responds to a change in price.