Elasticity Flashcards
1
Q
What does PED measure?
A
How much the quantity demanded of a good changes when the price changes
2
Q
What are the two categories for PED?
A
Elastic and inelastic
3
Q
What is Elastic Demand?
A
A change in price leads to a larger percentage change in demand
4
Q
What is Inelastic Demand?
A
A change in price leads to a smaller percentage change in demand
5
Q
What is the formula for PED?
A
% change in quantity demanded/ % change in price
6
Q
What is the formula for Percentage change?
A
(New price - Old price) / Old price x 100
