What does the price elasticity of demand indicate?

Multiple choice question for Basic of Economics. Select an option, then review the explanation below.

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How price varies due to shifts in demandThe speed at which sales fluctuateHow sensitive demand is to variations in priceThe total sales revenue at a specific price point

Explanation

Option A describes how price changes when demand shifts. Option B refers to how quickly sales change. Option C correctly defines price elasticity of demand as the degree to which demand responds to price changes. Option D relates to sales value at a fixed price.

Practice related questions from the same subject.

1.Which of the following best describes deflation?
2.Under what condition can two nations benefit from engaging in international trade?
3.Which of the following represents a legitimate form of currency?
4.Which political ideology is best summarized by the phrase, "From each according to his ability, to each according to his needs"?
5.Which type of currency experiences a decline in its exchange rate due to a continuous balance of payments deficit?

What does the price elasticity of demand indicate?

Explanation

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