Elasticity measures how one variable responds to changes in another variable, such as price.

• A. how something changes when its price changes
• B. the rate at which prices adjust to equilibrium
• C. the total revenue at different prices
• D. The substitution effect

Answer: (A)

Elasticity measures how one variable responds to changes in another, commonly how quantity responds to price. It is the percentage change in quantity divided by the percentage change in price. For example, if price rises by 5% and quantity demanded falls by 10%, the price elasticity of demand would be -2, showing a strong responsive move. This idea fits the statement because it captures how a change in price leads to a change in another variable.

The other ideas describe different notions: how quickly prices move toward a balance (price adjustment dynamics), the total revenue you get at different prices (a revenue concept that depends on both price and quantity), and the substitution effect (part of the behavioral response to a price change, not the overall measure of responsiveness).