Which of the following is the most precise definition of the own price elasticity of demand? A

Economics Jan 22, 2021

Which of the following is the most precise definition of the own price elasticity of demand?

A. It is the measure of how sensitive the consumer is to a change in price.

B. It measures the slope of the demand curve.

C. It measures the percentage change in quantity demanded of good x as a result of a percentage change in price per unit of good x.

D. It measures the total change in quantity demanded of good x as a result of a total change in price per unit of good x.

Expert Solution

A. It is the measure of how sensitive the consumer is to a change in price is the most accurate answer. Price elasticity of demand is used to determine how much a consumer will react to a change in price of a product. If they change their demand a lot it is said to be elastic, if their demand changes little to a change in price their demand is said to be more inelastic.

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