Question

Which of the following best describes the concept of price elasticity of demand

a) the proportion of change in sales

b) the amount by which quantity changes for a given change in price

C) the proportion of change in price for a given proportional change

D) the proportion of change in sales for a given proportional change in the consumer price level

Answer 1

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price, represented as the ratio of percentage changes in quantity demanded to percentage changes in price.

Step-by-step explanation:

The concept of price elasticity of demand is best described as the percentage change in the quantity demanded of a good or service divided by the percentage change in the price. It is a measure of how much the quantity demanded of a product changes in response to a change in price. When calculating the price elasticity of demand, the result can show us whether demand for the product is perfectly inelastic, inelastic, unit elastic, or elastic.