Chapter 7 - PED Flashcards
1
Q
Price elastic demand
A
A small change in price will lead to a big change in quantity demanded (PED > 1)
2
Q
Price inelastic demand
A
A large change in price will lead to a small change in quantity demanded (PED < 1)
3
Q
PED Values
A
PED = 0, perfectly price inelastic
PED = infinity, perfectly price elastic
PED = 1, unitary price elastic
PED > 1, price elastic
PED < 1, price inelastic
4
Q
Unitary price elastic demand
A
A change in price will lead to the same percentage change in quantity demanded
5
Q
Perfectly price inelastic demand
A
Demand for the product is unresponsive to the changes in price
