📚 Learning Guide
Price Elasticity of Demand
easy

Arrange the following steps in the process of determining the price elasticity of demand for a product: A) Calculate the percentage change in quantity demanded, B) Identify the initial price and quantity demanded, C) Calculate the percentage change in price, D) Use the elasticity formula to determine elasticity value.

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Learning Path
Learning Path

Question & Answer
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Understand Question
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Choose AnswerChoose the Best Answer

A

B → A → C → D

B

B → C → A → D

C

A → B → C → D

D

B → A → D → C

Understanding the Answer

Let's break down why this is correct

First you need the starting price and quantity, because you cannot compare changes without a baseline. Other options are incorrect because This order skips the first step of finding the percentage change in quantity, so you would try to use a formula without knowing how much the quantity moved; It starts with the quantity change before knowing the initial price and quantity, so you have no reference point for the change.

Key Concepts

Price Elasticity of Demand
Demand and Supply
Market Equilibrium
Topic

Price Elasticity of Demand

Difficulty

easy level question

Cognitive Level

understand

Deep Dive: Price Elasticity of Demand

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Definition
Definition

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price. It quantifies how much the quantity demanded will change in percentage terms in response to a one percent change in price. Elasticity values help determine the sensitivity of demand to price fluctuations.

Topic Definition

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price. It quantifies how much the quantity demanded will change in percentage terms in response to a one percent change in price. Elasticity values help determine the sensitivity of demand to price fluctuations.

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