ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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adaptability of suppliers when a change in demand alters the price of a good.
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responsiveness of quantity demanded to a change in a good’s price.
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responsiveness of a good’s price to a change in quantity demanded.
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responsiveness of quantity supplied to a change in quantity demanded.
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Detailed explanation-1: -Price elasticity measures the responsiveness of the quantity demanded or supplied of a good to a change in its price. It is computed as the percentage change in quantity demanded-or supplied-divided by the percentage change in price.
Detailed explanation-2: -Income elasticity of demand measures the responsiveness of demand for a particular good to changes in consumer income. The higher the income elasticity of demand for a particular good, the more demand for that good is tied to fluctuations in consumers’ income.
Detailed explanation-3: -The price elasticity of demand measures the sensitivity of the quantity demanded to changes in the price. Demand is inelastic if it does not respond much to price changes, and elastic if demand changes a lot when the price changes.
Detailed explanation-4: -The measure of responsiveness of the demand for a good towards the change in the price of a related good (substitutes and complements) is called cross price elasticity of demand.
Detailed explanation-5: -The price elasticity of demand is defined as the responsiveness of Quantity demanded to a change in price.