PED YED XED Flashcards
What is a relatively elastic value of PED?
More than 1.
Why is PED usually negative?
Because demand falls as price rises for most goods.
What is a inelastic value of PED?
Between 0 and 1.
What does a unit elasticity of demand look like? And what does it mean.
A good with unit elasticity of demand means that the size of the percentage change in demand is equal to the percentage change in price. And it looks like a curved L.
What is a inelastic value of YED?
Less than 1.
What is a elastic value of YED?
More than 1.
What is the value of a perfectly inelastic YED?
0.
What is the value of a perfectly elastic PED?
Plus or minus infinity.
What does it means if a XED value is positive?
It means the two goods are substitutes.
What does it mean if a XED value is negative?
.
It means the two goods are complementary
How do I calculate XED?
Percentage change in demand of good A over percentage change in price of good B.
What are the factors effecting the price elasticity of demand?
Take a SEAT,
The number of Substitutes a good has the more elastic the demand will be.
If the good is Essential the demand will be inelastic.
If the good is Addictive the demand will be inelastic.
If there is not a lot of Time then it’ll be inelastic.
What YED would a normal good have?
Between 0 and 1.
What YED would a luxury good have?
Over 1`.
What YED would a inferior good have?
Less than 1. (Negative)
