Price Elasticity of Demand Flashcards
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Flashcards covering key vocabulary and formulas related to Price Elasticity of Demand (PED).
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7 Terms
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Price Elasticity of Demand (PED)
Measures how much the quantity demanded of a good responds to a change in the price of that good.
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Elastic Products
Products where demand is sensitive to price changes; if the price rises, customers will shop around.
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Inelastic Products
Products where demand remains relatively constant regardless of price changes.
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PED Formula
% Change in Quantity Demanded/% change in Price
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% Change Formula
(New - Old) / Old x 100
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Elastic Demand
PED value is greater than 1. Customers are sensitive to price change.
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Inelastic Demand
PED value is less than 1. Customers will still buy the product if the price goes up.
Note 
Flashcards (33)