Which of the following statements about the price elasticity of demand is correct? The price elasticity of demand for a good measures the willingness of buyers of the good to buy less of the good as its price increases. Price elasticity of demand reflects the many economic, psychological, and social forces that shape consumer tastes. If good x has close substitutes and good y does not have close substitutes, then the demand for good x will be more elastic than the demand for good y. All of the above are correct.

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30-09-2019
Business

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Which of the following statements about the price elasticity of demand is correct? The price elasticity of demand for a good measures the willingness of buyers of the good to buy less of the good as its price increases. Price elasticity of demand reflects the many economic, psychological, and social forces that shape consumer tastes. If good x has close substitutes and good y does not have close substitutes, then the demand for good x will be more elastic than the demand for good y. All of the above are correct.

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jepessoa jepessoa · Answer 1 · 2019-10-04T22:45:07+02:00

Answer:

The answer is: The price elasticity of demand for a good measures the willingness of buyers of the good to buy less of the good as its price increases.

Explanation:

The price elasticity of demand measures the change in the quantity demanded of a product in relation to a change in its price.

The formula for determining the price elasticity of demand (PED) is:

PED = % of the change in Quantity Demanded / % of the change in price

If a good has a high PED (≥ 1) then it is called elastic, which means that any change in the price will change the quantity demanded in a greater proportion. If a good has a low PED (≤ 1) then it is called inelastic, which means that any change in the price will affect the quantity demanded in a smaller proportion.

Usually goods or services considered luxurious (e.g. gourmet cheese), tend to be very elastic (high PED). While products considered basic necessities (e.g. gasoline) tend to be very inelastic (low PED).

chilljain33 chilljain33 · Answer 2 · 2022-02-16T07:29:31+01:00

The price elasticity of demand is referred to as the change in the willingness of a customer to buy the same product with a given change in its price. So, the correct option is A.

What is the price elasticity of demand?

Price elasticity of demand is always calculated by the change in the demand of a product due to a change in its price for the same market it is available for sale in.

There is an indirect relationship between the price of a product and the quantity demanded for such product. So, if price decreases, the demand will increase and vice versa.

The change in quantity is always determined by the change in external factors such as change in consumer tastes and preferences, change in government regulations, price of substitute goods.

Hence, the correct option is A; the price elasticity of demand measures the willingness of buyers to buy less of the good as price increases.

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