Questions: term Quiz 4 (Chapter 5) : Jan 5 at 6:37pm Instructions Question 1 The price elasticity of demand is a measure of whether a product is a substitute or a complement. the amount of a product purchased when income increases. how much a change in demand affects the equilibrium price. buyers' responsiveness to changes in the price of a product. the equilibrium price of a product.

term Quiz 4 (Chapter 5) : Jan 5 at 6:37pm Instructions Question 1 The price elasticity of demand is a measure of whether a product is a substitute or a complement. the amount of a product purchased when income increases. how much a change in demand affects the equilibrium price. buyers' responsiveness to changes in the price of a product. the equilibrium price of a product.
Transcript text: term Quiz 4 (Chapter 5) : Jan 5 at 6:37pm Instructions Question 1 The price elasticity of demand is a measure of whether a product is a substitute or a complement. the amount of a product purchased when income increases. how much a change in demand affects the equilibrium price. buyers' responsiveness to changes in the price of a product. the equilibrium price of a product.
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Solution

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The answer is the fourth one: buyers' responsiveness to changes in the price of a product.

Explanation for each option:

  • Whether a product is a substitute or a complement: This is related to cross-price elasticity, not price elasticity of demand. Cross-price elasticity measures how the quantity demanded of one good changes in response to a price change of another good.

  • The amount of a product purchased when income increases: This describes income elasticity of demand, which measures how the quantity demanded of a good changes as consumer income changes.

  • How much a change in demand affects the equilibrium price: This is not directly related to price elasticity of demand. It involves the interaction of supply and demand in determining equilibrium price and quantity.

  • Buyers' responsiveness to changes in the price of a product: Correct. Price elasticity of demand measures how much the quantity demanded of a good responds to a change in the price of that good.

  • The equilibrium price of a product: This is determined by the intersection of supply and demand curves, not by price elasticity of demand.

In summary, price elasticity of demand specifically measures how sensitive the quantity demanded of a product is to changes in its price.

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