What is "price elasticity of demand"?

A The total revenue from sales

B A measure of how responsive quantity demanded is to a price change

C The difference between supply and demand

D The cost of producing one unit

✓ Correct Answer: Option B

PED measures the percentage change in quantity demanded divided by the percentage change in price. PED > 1 = elastic.

💡 Why is B) the correct answer?

The correct answer to the question "What is "price elasticity of demand"?" is Option B: A measure of how responsive quantity demanded is to a price change.

The other options — A) The total revenue from sales, C) The difference between supply and demand, D) The cost of producing one unit — are incorrect for this IB Exam Prep question. As explained above: PED measures the percentage change in quantity demanded divided by the percentage change in price. PED > 1 = elastic.

📚 About This IB Exam Prep Practice Question

This 2-level IB 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 IB Exam Prep practice test or use flashcards for spaced repetition review.

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What is "price elasticity of demand"?

✓ Correct Answer: Option B

📚 About This IB Exam Prep Practice Question

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