A Measure of the Responsiveness of Demand for a Product

question 20

Multiple Choice

A measure of the responsiveness of demand for a product to changes in price is called:

• A)price elasticity of demand.
• B)the value-cost ratio.
• C)cost dynamics.
• D)price rigidity.

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Definitions:

Marginal Cost

The uplift in collective cost emerging from the making of an additional unit of a good or service.

Producer Surplus

Producer surplus is the difference between what producers are willing to accept for a good or service versus what they actually receive, reflecting their economic benefit.

Monopolist

A single seller in a market with no close substitutes for the product or service they offer, leading to significant control over prices and output.

Marginal Cost

The added expense from the production of one additional unit of a product or service.