Question : Assertion: Price elasticity of demand measures the percentage change in quantity demanded given a one percent change in price.
Reason: Price elasticity of demand is calculated by dividing the percentage change in quantity demanded by the percentage change in price.
Option 1: Both the assertion and reason are correct and related.
Option 2: Both the assertion and reason are correct but not related.
Option 3: The assertion is correct, but the reason is incorrect.
Option 4: The assertion is incorrect, but the reason is correct.
Correct Answer: Both the assertion and reason are correct and related.
Solution : The correct answer is (A) Both the assertion and reason are correct and related.
The assertion states that price elasticity of demand measures the percentage change in quantity demanded given a one percent change in price. This is a correct statement. Price elasticity of demand measures the responsiveness of quantity demanded to changes in price, and it is often expressed as a percentage change.
The reason states that price elasticity of demand is calculated by dividing the percentage change in quantity demanded by the percentage change in price. This is also correct. Price elasticity of demand is calculated using the formula:
Price elasticity of demand = (Percentage change in quantity demanded) / (Percentage change in price)
Therefore, both the assertion and reason are correct and related. I apologize for the confusion caused by my initial response.
