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21 May, 16:00

The price elasticity of demand measures the:

Group of answer choices:

A. direction of the shift in the demand curve in response to a market event.

B. magnitude of the response in quantity demanded to a change in price.

C. size of the shortage created by the increase in demand.

D. responsiveness of quantity demanded to a change in income.

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Answers (1)
  1. 21 May, 16:05
    0
    The correct answer is letter "B": magnitude of the response in quantity demanded to a change in price.

    Explanation:

    Price elasticity of demand is the measure of how quantity demanded for a good or service changes as a result of changes in price. Price elasticity of demand is calculated by dividing the percentage change in quantity demanded by the percentage change in price. If the result is equal or greater than one (1) the good or service is elastic. If the result is lower than one (1), the product is inelastic.
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