PED and YED Flashcards
1
Q
what is price elasticity of demand
A
Establishing the relationship between demand and pricing
2
Q
Elastic products
A
- products where the demand changes a lot in relation to price changes
- doughnuts, luxury products
ALWAYS has a numerical value of -1.?
3
Q
Inelastic products
A
Products where the demand isn’t influenced by the price
- cigarettes, milk]
ALWAYS has a numerical value of -0.?
4
Q
How is PED calculated
A
% change in demand/ % change in price
5
Q
how is percentage change calculated
A
change/ original value x 100
6
Q
what is income elasticity of demand
A
how the income of society influences the demand of products
7
Q
YED calculation
A
% change in quantity demanded/ % change in income
8
Q
income elastic
A
MORE than +1
luxury products
when incomes decrease demand for luxury products decrease
9
Q
income inelastic
A
LESS than 1 but MORE than 0
necessity products
