AP (Advanced Placement) Macroeconomics: Questions 1 of 71

Question MCQ▾

Elasticity of demand can be best described as?

Choices

Choice (5)Response

a.

Price of other related commodity rise

b.

Change in taste and preference of consumer

c.

Degree of responsiveness of quantity demanded

d.

Change in Income of consumer

e.

Price change of product

Edit

Answer

c.

Explanation

  • The demand of a product not only determined by its price but also depends on some other factors like the income of the consumer and price of other related goods.
  • The general law of demand only indicates the direction of change in quantity demand of products and does not tell about how much it will change and in what range.
  • While ‘Elasticity of Demand’ shows the degree of responsiveness of quantity demand, when the price of the products, income of consumer or price of related goods changes.
  • Symbolically elasticity of demand is represented as () . So elasticity of demand shows the change in quantity demand due to change in the above mentioned factors.

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