Assertion: Price elasticity of demand always measures the percentage change in quantity demanded to the percentage change in the price of the commodity.
Reason: Price elasticity of demand can be denoted as: Price elasticity of demand = \(\frac{\text {percentage change in the price of the good }}{\text{percentage change in demand of the good} }\)
Answer & explanation
Correct answer: option 3
The correct answer is Option 3: Assertion (A) is true but Reasoning (R) is not correct.
Assertion: Price elasticity of demand always measures the percentage change in quantity demanded to the percentage change in the price of the commodity. This is correct. Price elasticity of demand is a measure of the responsiveness of the demand for a good to changes in its price.
Reason: Price elasticity of demand can be denoted as: Price elasticity of demand = \(\frac{\text {percentage change in the price of the good }}{\text{percentage change in demand of the good} }\). This is incorrect. Price elasticity of demand can be denoted as:
Ped = \(\frac{\text {percentage change in the quantity demanded of the good }}{\text{percentage change in price of the good} }\)