1.2.4 PED Flashcards
1
Q
what is PED
A
a measure of how much price changes demand
2
Q
equation for PED
A
percentage change in quantity demanded / percentage change in price of demand
3
Q
how to calculate percentage change
A
(new - old / old ) x 100
4
Q
answer greater than 1
A
elastic goods (considerable change)
5
Q
answer less than one
A
inelastic good (slightly responsive)
6
Q
answer is 1
A
unitary elasticity (cancelled out)
7
Q
how to reduce PED
A
- loyalty schemes
- become addictive
- necessity
- increase convenience
- USP
8
Q
why calculate PED
A
1) set correct price
2) see how volatile / loyal customers are
