price elasticity of demand

Question 1

if the PED is between 0 and -1

Answer 1

price Inelastic

Question 2

if the PED is -1

Answer 2

the percentage change in demand is the same as the percentage change in price (revenue stays the same)

Question 3

if PED is -1 or more

Answer 3

price elastic

Question 4

significance of PED to a business

Answer 4

so they can decide to:
- cut the costs instead of raising prices
- cut the price to give a sharp boost in demand
- attempt to make the product more price inelastic