The price elasticity of demand measures a) the responsiveness of the quantity demanded to changes in price. This concept refers to how much the quantity demanded of a good or service will change in relation to a change in its price.
In simpler terms, if the price of an item increases, how much less of that item will consumers be willing to buy? Conversely, if the price decreases, how much more will they buy? Understanding this elasticity helps businesses and policymakers determine the right pricing strategies and anticipate changes in consumer behavior.
Options b, c, and d do not accurately represent the definition of price elasticity of demand. Option b focuses on demand changes rather than price changes, option c refers to a budget constraint rather than demand responsiveness, and option d relates to price fluctuations instead of consumer response. Therefore, the correct understanding is that price elasticity specifically assesses how quantity demanded reacts to price alterations.