question archive Which of the following is explained by the price elasticity of demand? a
Which of the following is explained by the price elasticity of demand? a
Subject:EconomicsPrice:2.88 Bought3
Which of the following is explained by the price elasticity of demand?
a. The effect of price changes on supply.
b. The effect of price changes on the quantity supplied.
c. The effect of price changes on demand.
d. The effect of price changes on the quantity demanded.
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The correct answer to the given question is option d. The effect of price changes on the quantity demanded.
The concept of price elasticity of demand is used in economics to indicate the responsiveness of quantity demanded for a good or service on account of changes in its price. Mathematically, it is ascertained by dividing the percentage change in quantity demanded with the percentage change in its price. Depending upon the magnitude of price elasticity of demand, the demand for a product may be called as elastic, inelastic or unitary elastic.
