PED Flashcards
1
Q
PED Formula
A
% Change QD / % Change P
2
Q
What value is PED when elastic
A
Greater than 1
3
Q
What value is PED when inelastic
A
Less than 1
4
Q
What value is PED when unitary elastic
A
1
5
Q
What value is PED when perfectly inelastic
A
0
6
Q
What factors influence PED
A
Necessity
Addiction
Availability of Substitutes
Brand loyalty
Proportion of Income
Time Period
7
Q
State whether Luxury and Necessity goods are elastic or inelastic
A
Luxury - Elastic
Necessity - Inelastic
