Elasticity of Demand Flashcards
1
Q
Define the term ‘demand’.
A
How much people want to but something
2
Q
Define the phrase ‘elasticity of demand’.
A
How much a product is affected by when there is a change in demand
3
Q
What type of products aren’t affected when prices increase?
A
Essential products
Demand isn’t affected
4
Q
What type of products are affected when prices increase?
A
Non-essential products
Demand is affected
5
Q
How is price of elasticity of demand calculated?
A
% change in demand divided by the % change in price
6
Q
What does the price of elasticity of demand have to be for the demand not to be affected?
A
Less than 1 = inelastic
