AP Microeconomics Practice Quiz: Price Elasticity of Demand
Written by AP Content Team, Verified for 2026 AP Exams, Last updated: May 2026
Test your understanding with short quizzes. This quiz has 12 questions to check your progress.
Question 1 of 12
All Questions (12)
A) The slope of the demand curve at a specific point.
B) The responsiveness of the quantity demanded to changes in price.
C) The total expenditure of consumers on a particular good.
D) The number of available substitutes for a good.
Correct Answer: B
Content point 3 defines price elasticity of demand as 'the responsiveness of the quantity demanded to changes in price.' The other options are related concepts but not the direct definition; slope is explicitly differentiated from elasticity, total expenditure is affected by elasticity, and substitutes are a determinant of elasticity.
A) Inelastic
B) Unit elastic
C) Elastic
D) Proportional
Correct Answer: C
The price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Here, the magnitude is |-15% / 10%| = 1.5. According to content point 4a, 'When the magnitude of the value of elasticity is greater than 1, the demand is described as being elastic.'
A) Increase the price.
B) Decrease the price.
C) Keep the price the same.
D) The price change will not affect total revenue.
Correct Answer: A
According to content point 6, the impact of a price change on total revenue depends on elasticity. For inelastic demand (|E| < 1), the percentage decrease in quantity demanded is smaller than the percentage increase in price. Therefore, increasing the price will lead to an increase in total revenue.
A) Slope and elasticity are the same concept.
B) The slope is constant, but the elasticity varies.
C) The elasticity is constant, but the slope varies.
D) Both slope and elasticity are constant.
Correct Answer: B
Content point 3 states that 'Elasticity varies along a linear demand curve, meaning slope is not elasticity.' A linear demand curve has a constant slope by definition, therefore elasticity must be the variable component.
A) 0
B) 0.5
C) 1
D) 100
Correct Answer: C
Content point 4 clearly states that the ranges of elasticity are described as elastic or inelastic 'with the separating benchmark being a magnitude of 1.'
A) The demand for the good is elastic.
B) The demand for the good is inelastic.
C) The demand for the good is unit elastic.
D) The good has many available substitutes.
Correct Answer: B
Based on content point 6, the relationship between price and total revenue depends on elasticity. If a price decrease causes total revenue to fall, it means the percentage increase in quantity demanded was smaller than the percentage decrease in price. This is the definition of inelastic demand (|E| < 1).
A) Elastic
B) Inelastic
C) Perfectly inelastic
D) Unit elastic
Correct Answer: D
Content point 4c and the preamble to point 4 state that when the magnitude of elasticity is 1, 'the change in the price and the change in the quantity demanded are proportional.' This is the definition of unit elastic demand.
A) Elastic, because the magnitude is greater than 1.
B) Inelastic, because the magnitude is less than 1.
C) Unit elastic, because the magnitude is equal to 1.
D) Indeterminate from the data provided.
Correct Answer: A
The percentage change in price is ($18-$20)/$20 = -10%. The percentage change in quantity demanded is (60-50)/50 = +20%. The elasticity is |+20% / -10%| = 2.0. Since the magnitude (2.0) is greater than 1, the demand is elastic.
A) The slope of the supply curve.
B) The level of total revenue.
C) The availability of substitutes.
D) The magnitude of percentage changes in income.
Correct Answer: C
Content point 5 explicitly mentions one determinant: 'The price elasticity of demand depends on certain factors such as the availability of substitutes.'
A) Elastic
B) Inelastic
C) Unit elastic
D) Equal to zero
Correct Answer: C
Based on content point 6, the effect of a price change on total revenue depends on elasticity. If total revenue remains constant, the percentage change in quantity demanded must be equal and opposite to the percentage change in price. This occurs when the magnitude of elasticity is exactly 1, which is unit elastic demand.
A) Percentage change in price.
B) Change in price.
C) Percentage change in income.
D) Change in quantity supplied.
Correct Answer: A
Content point 3 provides the direct definition for the calculation: 'Price elasticity of demand is measured by the percentage change in quantity demanded divided by the percentage change in price.'
A) Elastic, and a price increase will decrease total revenue.
B) Inelastic, and a price increase will increase total revenue.
C) Unit elastic, and a price increase will not change total revenue.
D) Inelastic, and a price increase will decrease total revenue.
Correct Answer: B
According to content point 4b, when the magnitude is less than 1 (0.75 < 1), demand is inelastic. According to content point 6, when demand is inelastic, a price increase will lead to an increase in total revenue because the percentage drop in quantity is less than the percentage rise in price.