1.1.4 Elasticity

Question 1

Definition of Elasticity

Answer 1

The ability of something to stretch or expand and then return to its original size and shape

Question 2

Definition of substitutes

Answer 2

Things that can be used instead of something else

Question 3

Definition of proportion

Answer 3

The size or amount of something compared to the whole

Question 4

Definition of Inelastic

Answer 4

Not easily stretched or expanded

Question 5

Definition of Revenue

Answer 5

The income that a company receives from its business activity

Question 6

What does PED measure

Answer 6

Measures the responsiveness of demand as a result of change of price

Question 7

How to workout PED

Answer 7

% Change in price

Question 8

Characteristics of Price Elastic PED

Answer 8

Value: More than 1
Interpreting: Change in demand is more than the change in price

Question 9

Characteristics of Price Inelastic PED

Answer 9

Value: Less than 1
Interpreting: Change in demand is less than the change in price

Question 10

Characteristics of Unitary Price Elasticity

Answer 10

Value; Exactly 1
Interpreting: Change in demand=Change in price