Which of the following most completely describes the concept of price elasticity of demand?
a. A measure of the responsiveness of quantity demanded to a change in consumer income
b. A measure of the responsiveness of quantity demanded to a change in the price of a substitute
c. The percentage change in quantity demanded divided by the percentage change in price
d. The percentage change in quantity demanded divided by the percentage change in the price of a substitute
c
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The largest dollar amount of GDP is
a) rental payements b) government expenditures on goods and services c) profit d) net exports e) wages and salaries to employees
If the social cost of producing a good or service exceeds the private cost
A) the sum of consumer surplus and producer surplus is maximized. B) a positive externality exists. C) the market achieves economic efficiency. D) a negative externality exists.