ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the magnitude of the change in quantity due to a change in income
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the magnitude of the change in quantity due to a change in price
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how responsive sellers are to a change in the price of a good
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whether quantity demanded increases or decreases when price increases
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how responsive output is to a change in government spending
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Detailed explanation-1: -Price elasticity of demand is the ratio of the percentage change in quantity demanded of a product to the percentage change in price. Economists employ it to understand how supply and demand change when a product’s price changes.
Detailed explanation-2: -Elastic is a term used in economics to describe a change in the behavior of buyers and sellers in response to a change in price for a good or service. In other words, demand elasticity or inelasticity for a product or good is determined by how much demand for the product changes as the price increases or decreases.
Detailed explanation-3: -The price elasticity of demand is defined as the percentage change in the quantity demanded to the percentage change in its price. Hence, the correct option is D. Was this answer helpful?