Question

12. What is elasticity of demand?

(1) Demand that is not very sensitive to a
change in price
(2) Demand that is very sensitive to a change
in price
(3) Demand whose elasticity is exactly equal
to 1
(4) A measure of how consumers react to a
change in price.

Answer 1

4

Step-by-step explanation:

i am doing that assignment rn

Answer 2

(4) A measure of how consumers react to a change in price.

Step-by-step explanation:

• The elasticity of demand is simply the change in demand due to change in the price of a product.
• As we know demand is proportionate to the price of a product, when products are produced at a lower price, there is an increase in the demand.Similarly, if products are produced at a higher price, the demand also falls.
• The elasticity of demand is a measure of how consumers react to a change in price. It helps consumers to understand the market price of a commodity and thereby, reacts according to the price.