ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Responsiveness of price to a change in demand
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Responsiveness of supply to a change in price
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Responsiveness of demand to a change in price
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Responsiveness of price to a change in supply
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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: -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-3: -Understanding Income Elasticity of Demand 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-4: -The price elasticity of demand is defined as the responsiveness of Quantity demanded to a change in price.
Detailed explanation-5: -The variation in demand in response to a variation in price is called price elasticity of demand. It may also be defined as the ratio of the percentage change in quantity demanded to the percentage change in price of particular commodity.