Sia
Question
Microeconomics
Posted 9 months ago
Which of the following best describes what price elasticity of demand measures?
Choose 1 answer:
A How aware producers are of a change in price
(B) How much buyers change price in response to a change in quantity
(c) How responsive buyers are to a change in the price of a good
(D) How responsive buyers are to a change in income
(E) How responsive sellers are to a change in the price of a good
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Answer from Sia
Posted 9 months ago
Solution
a
Definition of Price Elasticity of Demand: Price elasticity of demand measures how much the quantity demanded of a good responds to a change in the price of that good
b
Correct Answer Identification: The correct answer is (C) How responsive buyers are to a change in the price of a good
Answer
(C) How responsive buyers are to a change in the price of a good
Key Concept
Price Elasticity of Demand
Explanation
Price elasticity of demand quantifies the responsiveness of the quantity demanded to changes in price. It is a critical concept in understanding consumer behavior and market dynamics.
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