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Question
The price elasticity of demand measures
A) the consumersʹ sensitivity to a price change.
B) the producersʹ sensitivity to a price change.
C) how much the market price changes in response to a change in demand.
D) how much the demand changes in response to a change in income.
Answer
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Related questions
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Which of the following statements is FALSE?
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Q:
Assume that coffee and tea are substitutes. Given a downward sloping demand curve for tea, an increase in the price of tea will causeA) an increase in the demand for coffee. B) a decrease in the demand for coffee.C) a leftward shift of the demand curve for tea. D) a leftward shift in the demand for coffee.
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The United Statesʹ balance of payments is likely to improve whenA) there is an increase in political instability in other countries.B) the inflation rate in the United States rises relative to other countries.C) the American government increases its spending on foreign aid. D) American people want to invest more in foreign countries.