price elasticity Flashcards
1
Q
What are the factors that affect PED
A
substitutability
percentage of income
needs or wants
addictive goods
time
2
Q
What equation is PED measured using?
A
%change in quantity demanded over %change in price
3
Q
What are the factors that affect PES?
A
Availability of stocks
Spare production capacity
ease of switching between alternative methods
Time
4
Q
What equation is PES measured using?
A
%change in quantity supplied
over
%change in price
5
Q
If the outcome of a PED calculation is greater than 1, what is it
A
Elastic
6
Q
If the outcome of a PED calculation is less than 1, what is it
A
Inelastic
7
Q
If the outcome of a PES calculation is greater than 1, what is it
A
Elastic
8
Q
If the outcome of a PES calculation is less than 1, what is it
A
Inelastic
