Question

Which of the following can be measured by price elasticity of demand?a) the impact of marginal revenue of a firm on its average revenueb) the sensitivity of customer demand for a product to changes in the supply of the productc) the sensitivity of a firm's revenues to changes in its product's priced) the impact of fixed costs and variable costs on the break-even pointe) the percentage change in profit for a percentage change in product price

Answer 1

Price elasticity of demand measures the sensitivity of a firm's revenues to changes in its product's price.

Step-by-step explanation:

Price elasticity of demand measures the percentage of rise in the demand when a priced is lowered.

You can talk of elastic demand when the quantity changes more than the price.

Unit elastic when the quantity demanded change the same proportion of the change in the price.

And inleastic demand when the change in the quantity demanded is minor to change in the price.