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 |
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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