1.2.4 Price elasticity of demand Flashcards

1
Q

What is price elasticity of demand?

A

relationship between responsiveness of demand and change in price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is price inelastic demand?

A

change in demand is not as big as change in price

eg petrol

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is price elastic of demand?

A

change in demand greater than change in price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is the calculation of PED?

A

Percentage change in quantity demanded
divided by
percentage change in price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

If value is less than 1 what does it mean?

A

Price inelastic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

If value is greater than 1 what does it mean?

A

price elastic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

3 factor influencing PED?

A

Time
competition for same product
branding

How well did you know this?
1
Not at all
2
3
4
5
Perfectly