Price Elasticity

Question 1

Formula for PED

Answer 1

% change in quantity demanded
Divided by
% change In price

Or 
Original price
Divided 
Original quantity 
X 
Change in quantity 
Divide 
Change in price

Question 2

= Greater than 1

Answer 2

Price inelastic

Change in quantity demanded is less than change in price

Question 3

=1

Answer 3

Unitary elastic

Change in quantity demanded is the same as change in price

Question 4

> 1

Answer 4

Price elastic

Change in quantity demanded is greater than the change in price

Question 5

What is price elasticity

Answer 5

Shows how much the demand of a product will be affected due to a change in price