ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The % change in price over the % change in quantity demanded
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The % change in quantity demanded over the % change in price
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The change in price over the change in quantity demaned
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The change in quantity demanded over the change in price
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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: -Price Elasticity of Demand = Percentage change in quantity / Percentage change in price.
Detailed explanation-3: -A graphical representation of the relationship between price and quantity is displayed on the demand curve, and the change in demand is a movement along the demand curve. The formula to calculate the relative change is y = mx + c, where mx = gradient of the slope * value on the x-axis, and c = intercept on the y-axis.
Detailed explanation-4: -the price elasticity of demand coefficient measures: buyer responsiveness to price changes. the basic formula for the price elasticity of demand coefficient is: percentage change in quantity demanded/percentage change in price.