WAEC Economics 1993 Question 7

Question 7

Elasticity

Price elasticity of demand is defined as the

  1. A.responsiveness of demand to changes in price
  2. B.responsiveness of price to changes in demand
  3. C.increase in demand resulting from a rise in price
  4. D.unit decrease in price resulting from a fall in demand
  5. 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.