Question

How is the price elasticity of demand​ measured? The price elasticity of demand is measured as

A. the percentage change in the quantity demandedquantity demanded divided by the percentage change in the quantity suppliedquantity supplied.
B. the percentage change in the quantity demanded divided by the percentage change in price.
C. the slope of the demand curve.
D. the change in the quantity demandedthe change in the quantity demanded divided by the change in pricethe change in price.
E. the quantity demandedthe quantity demanded divided by priceprice.

Answer 1

B. the percentage change in the quantity demanded divided by the percentage change in price.

Step-by-step explanation:

The formula to compute the price elasticity of demand is shown below:

= (Percentage change in quantity demanded ÷ Percentage change in price)

where,

The Percentage change in quantity demanded equals to

= (New quantity - old quantity) ÷ ((New quantity + old quantity)

And, the Percentage change in price equals to

= (New price - old price) ÷ ((New price + old price)