Question : The elasticity of demand is the degree of responsiveness of demand for a commodity to a ___________.
Option 1: Change in consumer's wealth
Option 2: Change in the price of substitutes
Option 3: Change in consumer's taste
Option 4: Change its price
Correct Answer: Change its price
Solution : The correct option is to Change its price
The elasticity of demand gauges how responsive the quantity demand of a product or service is to shifts in its price. Elastic demand will alter significantly in response to even small price changes, as the amount requested will shift.
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