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
2
Q
What is price inelastic demand?
A
change in demand is not as big as change in price
eg petrol
3
Q
What is price elastic of demand?
A
change in demand greater than change in price
4
Q
What is the calculation of PED?
A
Percentage change in quantity demanded
divided by
percentage change in price
5
Q
If value is less than 1 what does it mean?
A
Price inelastic
6
Q
If value is greater than 1 what does it mean?
A
price elastic
7
Q
3 factor influencing PED?
A
Time
competition for same product
branding
