Question

The price elasticity of demand measures by what percent the _____ will change following a 1% price increase. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices quantity demanded price revenue quality

Answer 1

The price elasticity of demand measures by what percent the quantity demanded will change following a 1% price increase.

What is the price elasticity of demand?

The price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.

Price elasticity of demand = percentage change in quantity demanded / percentage change in price

For example if price increases by 10% and quantity demanded decreases by 20%, the price elasticity of demand would be 2.

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