1.2.4 - PED

Question 1

what is PED

Answer 1

• PED stands for price elasticity of demand
• PED measures the responsiveness of demand to a change in price

Question 2

What is the PED formula

Answer 2

% change in Quantity demanded / (% change in Price

Question 3

How do you calculate % change in price

Answer 3

( Price new – Price old /
Price old ) x 100

Question 4

What is elastic demand

Answer 4

• Demand for the product is sensitive to a change in price
• PED value will be more than 1

Question 5

What is inelastic demand

Answer 5

• Very little change in demand with a change in price
• The PED value will be between 0 and 1

Question 6

All PED value are negative

Answer 6

All PED value are negative