Price elasticity of demand is the responsiveness of quantity demanded to a change in

Step 1: Analyze the question The question asks what a change in which variable causes quantity demanded to respond, when we talk about price elasticity of demand.

Step 2: Explain the concept Elasticity measures responsiveness. The first word tells you which variable is changing:

• Price elasticity of demand: the change in the product's own price.
• Cross elasticity of demand: the change in the price of another product.
• Income elasticity of demand: the change in the buyer's income.

Formula:

PED = (% change in quantity demanded) ÷ (% change in price of the product)

Step 3: Check each option

• A. Demand for the product: Wrong. A change in demand is a shift of the whole curve, not the cause measured by PED.
• B. Price of another product: This is cross elasticity of demand.
• C. Income of the buyer: This is income elasticity of demand.
• D. Price of the product: Correct. PED measures how much quantity demanded changes when the product's own price changes.

Step 4: Answer The correct option is **D. price of the product.

Tip: Look at the first word of the term. "Price elasticity" means the product's own price, "cross" means another product's price, and "income" means the buyer's income. In every case, the thing measured is the response of quantity demanded.