Question

The price elasticity of demand depends on

a. the units used to measure price and the units used to measure quantity.

b. the units used to measure price but not the units used to measure quantity.

c. the units used to measure quantity but not the units used to measure price.

d. neither the units used to measure price nor the units used to measure quantity.

Answer 1

Solutuion:-Option A is correct.

A.the units used to measure price and the units used to measure quantity.

Explaination:-The price elasticity of demand depends on the units used to measure price and the units used to measure quantity. The price elasticity of demand largely depends on time that consumers take to adjust themselves with new prices of a product.Price Elasticity of Demand (PED) is defined as the responsiveness of quantity demanded to a change in price. It is also the slope of the demand curve. The price elasticity is very low. Likewise, for luxury goods, price elasticity is high, while for prestige goods, such as, jewels, rare coins.