ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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price as quantity demand changes
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quantity demanded as price changes
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demand as supply shifts.
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price as demand shifts
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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: -According to Kenneth Boulding : “Elasticity of demand measures the responsiveness of demand to changes in price."
Detailed explanation-3: -A measure of the responsiveness of quantity demanded to changes in the price of a related good is known as cross elasticity of demand. Cross elasticity of demand is calculated by dividing the proportionate change of quantity demanded of one commodity by the proportionate change of price of another commodity.
Detailed explanation-4: -The elasticity of demand, or demand elasticity, measures how demand responds to a change in price or income. It is commonly referred to as price elasticity of demand because the price of a good or service is the most common economic factor used to measure it.
Detailed explanation-5: -Elasticity of demand measures the responsiveness of the quantity demanded of the goods to a change in the price of the goods. It is calculated by diving the proportionate change in quantity demand by proportionate change in price level.