Questions: 1. The price elasticity of demand measures a. buyers' responsiveness to a change in the price of a good. b. the extent to which demand increases as additional buyers enter the market. c. how much more of a good consumers will demand when incomes rise. d. the movement along a supply curve when there is a change in demand.

1. The price elasticity of demand measures
a. buyers' responsiveness to a change in the price of a good.
b. the extent to which demand increases as additional buyers enter the market.
c. how much more of a good consumers will demand when incomes rise.
d. the movement along a supply curve when there is a change in demand.
Transcript text: 1. The price elasticity of demand measures a. buyers' responsiveness to a change in the price of a good. b. the extent to which demand increases as additional buyers enter the market. c. how much more of a good consumers will demand when incomes rise. d. the movement along a supply curve when there is a change in demand.
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Solution

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The answer is the first one (a): buyers' responsiveness to a change in the price of a good.

Explanation for each option:

a. Buyers' responsiveness to a change in the price of a good: This is the correct definition of price elasticity of demand. It measures how much the quantity demanded of a good responds to a change in the price of that good.

b. The extent to which demand increases as additional buyers enter the market: This describes a change in demand due to an increase in the number of buyers, not the price elasticity of demand.

c. How much more of a good consumers will demand when incomes rise: This describes income elasticity of demand, not price elasticity. Income elasticity measures how the quantity demanded changes as consumer income changes.

d. The movement along a supply curve when there is a change in demand: This describes a change in quantity supplied due to a change in demand, not the price elasticity of demand.

In summary, price elasticity of demand specifically refers to the responsiveness of the quantity demanded to changes in the price of the good itself.

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