ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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PED measures the degree of responsiveness of price of a good to a change in quantity demanded of a good, ceteris paribus
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PED measures the degree of responsiveness of demand of a food to a change in its price, ceteris paribus
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PED measures the degree of responsiveness of quantity demanded of a good to a change in its price, ceteris paribus
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PED measures the degree of responsiveness of price of a good to a change in demand of a good, ceteris paribus
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Detailed explanation-1: -The price elasticity of demand (PED) for a good is a measure of the degree of responsiveness of the quantity demanded to a change in the price, ceteris paribus. The PED for a good is calculated by dividing the percentage change in the quantity demanded by the percentage change in the price.
Detailed explanation-2: -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-3: -Price elasticity of demand is a measurement of the change in consumption of a product in relation to a change in its price. A good is perfectly elastic if the price elasticity is infinite (if demand changes substantially even with minimal price change).
Detailed explanation-4: -The elasticity of demand refers to the degree to which demand responds to a change in an economic factor. Price is the most common economic factor used when determining elasticity. Other factors include income level and substitute availability. Elasticity measures how demand shifts when economic factors change.
Detailed explanation-5: -Income Elasticity: Degree of responsiveness of a change in quantity demanded to a change in the income of the consumer.