The price elasticity of demand measures which of the following?

A. Responsiveness of price to a change in quantity supplied

B. Responsiveness of quantity demanded to a change in price

C. Responsiveness of price to a change in quantity demanded

D. Adaptability of buyers to changes in demand

E. Responsiveness of quantity demanded to a change in quantity supplied

The correct answer to the given question is option B. Responsiveness of quantity demanded to a change in price

The price elasticity of demand for a given good or service is determined by dividing the percentage change in its quantity demanded by the percentage change in its price. Hence, it indicates the responsiveness of quantity demanded for the product to the changes in price. The value of price elasticity of demand is usually negative as any increase or positive change in prices leads to a negative change or decrease in the quantity demanded.

If the magnitude of price elasticity of demand is less than 1, the demand is called as inelastic and if the magnitude of price elasticity of demand is more than 1, the demand is called as elastic.