PED and YED Flashcards
1
Q
What is elasticity?
A
How much one variable changes in response to a change in another related variable.
2
Q
What is the formula for PED?
A
%change in quantity demanded / %change in price
3
Q
What is elastic demand?
A
When consumers are very responsive to a change in price. The answer is always beyond -1
4
Q
What is inelastic demand?
A
When consumers are less responsive to price changes. The answer is always between 0 and -1
5
Q
What is the difference between price elastic and price inelastic?
A
Price elastic demand has a bigger change than the change in price and price inelastic demand will not change as much when you adapt the price.
