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Elasticity of demand is the degree of responsiveness of demand of a commodity to a
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- change in consumers’ wealth
- change in the price of substitutes
- change in consumers’ tastes
- change in its price
- change in consumers’ wealth
Correct Option: D
The elasticity of demand, also known as price elasticity of demand, is the degree of responsiveness of demand to change in price. Its measure depends upon comparing the percentage change in the price with the resultant percentage change in the quantity demanded. Thus, elasticity of demand is the ratio of percentage change in amount demanded to a percentage change in price.
