📈 CFA Exam Prep

Price elasticity of demand measures:

A The slope of supply
B The responsiveness of quantity demanded to a change in price
C Total revenue only
D Profit margins

✓ Correct Answer: Option B

Price elasticity of demand = %ΔQd / %ΔP. Higher elasticity means quantity is more responsive to price changes.

💡 Why is B) the correct answer?

The correct answer to the question "Price elasticity of demand measures:" is Option B: The responsiveness of quantity demanded to a change in price.

The other options — A) The slope of supply, C) Total revenue only, D) Profit margins — are incorrect for this CFA Exam Prep question. As explained above: Price elasticity of demand = %ΔQd / %ΔP. Higher elasticity means quantity is more responsive to price changes.

📚 About This CFA Exam Prep Practice Question

This 2-level CFA Exam Prep question from the Economics topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free CFA Exam Prep practice test or use flashcards for spaced repetition review.

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