A measure of the responsiveness of the quantity demanded to a change in price is called?

A measure of the responsiveness of the quantity demanded to a change in price is called?

• A. Elasticity
• B. Demand
• C. PED
• D. Aggregation

Answer: (A)

Elasticity captures how much quantity demanded changes when price changes. It’s calculated as the percentage change in quantity demanded divided by the percentage change in price. This measure directly describes responsiveness: when elasticity is large, demand is highly responsive to price; when small, demand is less responsive. In this context, the specific label for the measure is price elasticity of demand, but the general term describing the concept is elasticity, which is why this answer fits best. The other ideas don’t describe responsiveness: demand is just the relationship between price and quantity; aggregation is about summing data across markets; and price elasticity of demand is simply the precise name for this measure.

Elasticity captures how much quantity demanded changes when price changes. It’s calculated as the percentage change in quantity demanded divided by the percentage change in price. This measure directly describes responsiveness: when elasticity is large, demand is highly responsive to price; when small, demand is less responsive. In this context, the specific label for the measure is price elasticity of demand, but the general term describing the concept is elasticity, which is why this answer fits best. The other ideas don’t describe responsiveness: demand is just the relationship between price and quantity; aggregation is about summing data across markets; and price elasticity of demand is simply the precise name for this measure.