2.7 PED Flashcards
1
Q
What is PED
A
PED reveals how responsive quantity demanded is to price
2
Q
What is the formula for PED
A
PED = (percentage change of quantity demanded) / (percentage change of price)
3
Q
PED < 1
A
Price inelastic
4
Q
PED > 1
A
Price elastic
5
Q
Draw a perfectly inelastic graph
A
6
Q
Draw a relatively inelastic graph
A
7
Q
Draw a unitary elasticity graph
A
8
Q
Draw a relatively elastic graph
A
9
Q
Draw a perfectly elastic graph
A
10
Q
What factors affect PED
A
Substitutes
Luxury or necessity
Addiction
Percentage of income
Definition of the market
Time
