Price elasticity of demand p2 Flashcards
1
Q
If the value of PED is less then 1, what does it mean?
A
Price Inelastic
2
Q
What is inelastic demand?
A
Where the % change in demand is proportionately less than the % change in price
(change in demand is not as big as change in price)
3
Q
What should you do if inelastic demand?
A
increase the price
4
Q
What does it mean the closer the ped is to 0
A
The closer the value is to 0 means the less likely that price will affect demand
5
Q
What values would inelastic ped be between?
A
0-1
