Micro 1.2 PED Flashcards
1
Q
What is PED?
A
The responsiveness of quantity demanded to a proportionate change in price
2
Q
What is the PED formula?
A
% change in quantity demanded / % change in price
3
Q
What value of PED is perfectly inelastic?
A
0
4
Q
What value of PED is relatively inelastic?
A
0~1
5
Q
What value of PED is unitary elastic?
A
1
6
Q
What value of PED is relatively elastic?
A
> 1
7
Q
What value of PED is perfectly elastic?
A
infinite
8
Q
What type of demand does a luxury good have?
A
Elastic
9
Q
What type of demand does a necessity good have?
A
Inelastic
