Demand

Question 1

What is price elasticity of demand?

Answer 1

This is the measure of the change and responsiveness of a products demand in response to changes in its price.

Question 2

What is price inelastic demand?

Answer 2

This describes demand for a product that has relatively little responsiveness and changes to changes in its price,mainly due to the lack of substitutes for a product.

Question 3

What is price elastic demand?

Answer 3

This describes demand for a product that is responsive to changes in its price, usually due to the availability of substitutes

Question 4

What is meant by perfectly price inelastic?

Answer 4

This means the change in the price of a product has no effect on the responsiveness and demand of a product , this means that the PED is = 0

Question 5

What is meant by perfectly price elastic?

Answer 5

This means any change in prices cause there to completely no demand for the product, this means that PED is = ∞(infinity)

Question 6

What is meant by unitary price elasticity?

Answer 6

This means that the percentage change in price of a product is proportional to the percentage change in quantity demanded, meaning that there is no change in sales revenues

Question 7

What are 4 determinants of price elasticity of demand?

Answer 7

T-Time
H- Habits
I - Income
S - Substitutes

Question 8

What is the largest determinant in change of PED?

Answer 8

SUBSTITUTES

Question 9

What is sales revenue?

Answer 9

The some of money received from the sales of goods and services

Question 10

What is price discrimination?

Answer 10

This occurs when firms charge different prices to different customers due to differences in PED