Introduction to Economics 1 Deneme Sınavı Sorusu #1256823
Which of the following statement is correct about the price elasticity of demand?
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It measures how much the quantity demanded (Qd) of a good changes when there is a change in the price of that good (P). |
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It indicates that there is an inverse relationship between the price of a good and the quantity demanded of that good. |
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It states that when the price of a good increases the quantity demanded of that good falls. |
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The price elasticity of demand measures the price-sensitivity or responsiveness of producers. |
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It measures how much the quantity demanded (Qdx) of a good changes when there is a change in the price of a substitute good (Py). |
Price Elasticity of Demand
The law of demand indicates that there is an inverse relationship between the price of a good and the quantity demanded of that good. The law states that when the price of a good increases the quantity demanded of that good falls. The price elasticity of demand measures how much the quantity demanded (Qd) of a good changes when there is a change in the price of that good (P). Hence, the price elasticity of demand measures the price-sensitivity or responsiveness of consumers.
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