Final answer:
The price elasticity of demand measures the responsiveness of the quantity demanded to changes in price. It can be greater than 1, equal to 1, or less than 1, indicating relatively elastic, unitary, or inelastic demand, respectively.
Step-by-step explanation:
The price elasticity of demand measures the responsiveness of the quantity demanded to changes in price. If the price elasticity of demand is greater than 1, it means that a small change in price will result in a proportionally larger change in quantity demanded, indicating a relatively elastic demand.
The price elasticity of demand measures the responsiveness of the quantity demanded to changes in price. It can be greater than 1, equal to 1, or less than 1, indicating relatively elastic, unitary, or inelastic demand, respectively.
If the price elasticity of demand is equal to 1, it means that a change in price will result in an equal percentage change in quantity demanded, indicating unitary elasticity. If the price elasticity of demand is less than 1, it means that a change in price will result in a smaller percentage change in quantity demanded, indicating a relatively inelastic demand.