ECONOMICS
MARKETS AND PRICES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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demand
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price
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costs of production
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the size of firms
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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 price elasticity of supply is a measure of how sensitive the quantity supplied of a good is to changes in price. It is calculated as the percentage change in quantity supplied divided by the percentage change in price.
Detailed explanation-3: -Price elasticity of supply measures the responsiveness to the supply of a good or service after a change in its market price. According to basic economic theory, the supply of a good will increase when its price rises.
Detailed explanation-4: -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-5: -Key Takeaways Income elasticity of demand is an economic measure of how responsive the quantity demanded for a good or service is to a change in income. The formula for calculating income elasticity of demand is the percentage change in quantity demanded divided by the percentage change in income.