There were 2 kids who were discussing price elasticity of demand.
Garv said, "Price elasticity of demand is a measure of the responsiveness of quantity demanded for a good to changes in its price."
Then Adhyayan said, "Price elasticity of demand is the percentage change in quantity demanded divided by the percentage change in price."

Both of them started arguing that they were correct and the other person was wrong. In your view, who is correct?

Both are correct

The correct answer is option 3: Both are correct

Both Garv and Adhyayan are correct, but they are describing different aspects of the price elasticity of demand.

• Garv’s statement accurately describes the concept of price elasticity of demand: it is indeed a measure of how responsive the quantity demanded of a good is to changes in its price.

• Adhyayan’s statement provides the formula for calculating price elasticity of demand, which is the percentage change in quantity demanded divided by the percentage change in price.

Price elasticity of demand measures the degree of responsiveness of the quantity demanded of a commodity to the change in price of the good. It is measured as: 

P_ed =  \(\frac{\text {% change in quantity demanded}}{\text {% change in price }}\)