Price Elasticity Of Demand Flashcards
1
Q
What is the formula for for PED
A
% change in quantity demanded / % change in price
2
Q
What 4 factors affect PED
A
Type of good
How many substitute goods
% of income
Brand loyalty
3
Q
What is cross PED
A
Measures the responsiveness of demand for for good X following a change in price of a related good (Y)
4
Q
What is the formula for cross PED
A
% change in demand of 1 good / % change in price of another good
5
Q
What is income elasticity
A
How responsive a good is to a change in income
6
Q
Formula for income elasticity of demand
A
% change in demand / % change in income
