The elasticity of demand measures:

A Total revenue

B The responsiveness of quantity demanded to a change in price

C Supply changes

D Profit margin

✓ Correct Answer: Option B

Price elasticity = %ΔQd / %ΔP. Elastic >1, inelastic <1, unitary =1.

💡 Why is B) the correct answer?

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

The other options — A) Total revenue, C) Supply changes, D) Profit margin — are incorrect for this CFA Exam Prep question. As explained above: Price elasticity = %ΔQd / %ΔP. Elastic >1, inelastic

📚 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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The elasticity of demand measures:

✓ Correct Answer: Option B

📚 About This CFA Exam Prep Practice Question

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