The correct answer is C. $$\frac{{dQ}}{{dP}} \times \frac{P}{Q}$$
Price elasticity of demand (PED) is a measure of how responsive consumers are to changes in the price of a good. It is calculated as the percentage change in quantity demanded divided by the percentage change in price.
The formula for PED is:
$$PED = \frac{{dQ}}{{dP}} \times \frac{P}{Q}$$
where:
- $dQ$ is the change in quantity demanded
- $dP$ is the change in price
- $P$ is the initial price
- $Q$ is the initial quantity demanded
PED can be positive, negative, or zero. A positive PED indicates that consumers are responsive to changes in price, and that a decrease in price will lead to an increase in quantity demanded, and vice versa. A negative PED indicates that consumers are not responsive to changes in price, and that a decrease in price will not lead to a significant increase in quantity demanded, and vice versa. A PED of zero indicates that consumers are not responsive to changes in price at all, and that a change in price will not lead to any change in quantity demanded.
PED is an important concept in economics, as it can be used to predict how consumers will respond to changes in prices. It is also used to calculate the impact of taxes and subsidies on the market for a good.
The other options are incorrect because they do not correctly calculate PED. Option A is the formula for the arc elasticity of demand, which is a measure of the average responsiveness of consumers to changes in price over a range of prices. Option B is the formula for the point elasticity of demand, which is a measure of the responsiveness of consumers to changes in price at a specific point on the demand curve. Option D is the formula for the income elasticity of demand, which is a measure of how responsive consumers are to changes in income.