Price and Income Elasticity of Demand Flashcards
1
Q
what is price elasticity of demand?
A
the relationship between change in demand of a product and the change in price of the same product
2
Q
what is the equation for PED?
A
%change in quantity demanded / %change in price
3
Q
what is income elasticity of demand?
A
the relationship between quantity demanded and the change in income of the customers
4
Q
what is the equation for IED?
A
%change in quantity demanded / % change in income
