Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The responsiveness of quantity demanded to a change in price
B
The total quantity of goods available for sale
C
The relationship between consumer income and demand
D
The fixed quantity of a product offered in the market
Understanding the Answer
Let's break down why this is correct
Answer
Elasticity of demand in economics refers to how much the quantity of a product people want to buy changes when the price of that product changes. If a small price change leads to a big change in the amount bought, we say the demand is elastic. For example, if the price of a popular snack increases by 10% and people buy 30% less of it, this shows that the demand is elastic. On the other hand, if a price change doesn’t affect the quantity much, the demand is inelastic. Understanding elasticity helps businesses and policymakers make better decisions about pricing and production.
Detailed Explanation
Elasticity of demand shows how much the amount people want to buy changes when prices go up or down. Other options are incorrect because This option confuses demand with supply; This option mixes up income with demand.
Key Concepts
Definition of elasticity of demand
Topic
Elasticity of Demand
Difficulty
easy level question
Cognitive Level
understand
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