1.2.4 Price Elasticity Of Demand Flashcards
1
Q
What is the calculation for price elasticity of demand
A
% Change in quantity demanded/% Change in price
2
Q
Price elasticity of demand
A
Responsiveness of demand to a change in price
3
Q
Price elastic demand
A
A change in price results in a greater change in demand
4
Q
Price inelastic demand
A
A change in price results in a smaller change in demand
5
Q
Percentage change
A
Difference between the two numbers/Original number X 100
6
Q
Three Factors affecting price elasticity of demand
A
Any three from: Time, Competition for same product, Branding and Income
7
Q
Interpretation of numerical values of price elasticity of demand
A
If a value is <1 it is price inelastic. If value is >=1 then it is price elastic.
