ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The % change in price over the % change in quantity demanded
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The % change in quantity demanded over the % change in price
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The change in price over the change in quantity demaned
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The change in quantity demanded over the change in price
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Detailed explanation-1: -The price elasticity of demand is the percentage change in the quantity demanded of a good or service divided by the percentage change in the price. The price elasticity of supply is the percentage change in quantity supplied divided by the percentage change in price.
Detailed explanation-2: -Price Elasticity of Demand = Percentage change in quantity / Percentage change in price.
Detailed explanation-3: -Price elasticity formula: Ed = percentage change in Qd / percentage change in Price. If the percentage change is not given in a problem, it can be computed using the following formula: Percentage change in Qd = (Q1-Q2) / [1/2 (Q1+Q2)] where Q1 = initial Qd, and Q2 = new Qd.
Detailed explanation-4: -A graphical representation of the relationship between price and quantity is displayed on the demand curve, and the change in demand is a movement along the demand curve. The formula to calculate the relative change is y = mx + c, where mx = gradient of the slope * value on the x-axis, and c = intercept on the y-axis.
Detailed explanation-5: -The arc price elasticity of demand measures the responsiveness of quantity demanded to a price. It takes the elasticity of demand at a particular point on the demand curve, or between two points on the curve.