Elasticities

Question 1

What is the formula for PED?

Answer 1

PED= %Change in Qd / %Change in P

Question 2

What are the values of inelastic PED’s?

Answer 2

Between 0 and -1

Question 3

What are the values of elastic PED’s?

Answer 3

Between -1 and - ♾️

Question 4

What is the value for unitary PED?

Answer 4

Exactly -1

Question 5

What does elastic, inelastic, and unitary elastic mean?

Answer 5

Elastic: It changes in response to price

Inelastic: It doesn’t change in response to price

Unitary elastic: The change in price is the same as the change in demand

Question 6

What is the value for perfect inelasticity?

Answer 6

0

Question 7

What are the 5 factors affecting PED? NASBIT

Answer 7

●N ecessary/Luxury
●A ddictive/Habits
●S ubstitute goods
●B rand loyalty
●I ncome proportion
●T ime period

Question 8

What are the 6 conditions of demand? APPSIF

Answer 8

Advertising
Population and age structure
Price of other goods
Seasons
Income
Fashion and trends

Question 9

What is the formula for YED?

Answer 9

YED= %◇Qd ÷ %◇ Y

Question 10

What is the formula for PES?

Answer 10

PES= %Change in Qs/ %Change in P

Question 11

What is the formula for XED?

Answer 11

XED= %Change in Qd of Good A/ %Change in P of Good B