Price Elasticity of Demand (PED) Flashcards
1
Q
What does the acronym “PASIFIC” stand for?
A
Population, Advertising, Substitute goods, Income, Fashion trends, Interest rates, Complementary goods
2
Q
What are elastic goods?
A
Where there’s a large proportionate response in quantity demanded to a change in price
3
Q
What is the formula for Price Elasticity of Demand (PED)?
A
% change in quantity demanded divided by % change in price
4
Q
What defines the PED of a good being elastic, inelastic or unitary elastic?
A
Elastic = + or - > 1, Inelastic = + or - < 1, Unitary elastic = 1
5
Q
How do you work out Total Cost?
A
Fixed Cost + Variable Cost
