PED

Responsiveness

The percentage change in quantity demand to the percentage change in price.

Formula

Percentage change in Quantity Demand / % Price change in Quantity demand.

Elasticity

How much one factor changes when you change another.

Elastic Demand

When quantity is sensitive to a change in price, resulting in a decrease in quantity demand when price increases.

Inelastic Demand

When quantity is insensitive to a change in price, resulting in a small decrease in quantity demand when price increases.

Perfectly Elastic Demand

Change in price leads to a total change in quantity demand, with quantity demand falling to 0.

Perfectly Inelastic Demand

Change in price leads to no change in quantity demand.

Unitary Demand

Percentage change in quantity demand is the same as the percentage change in price.

Substitutes

Goods that can be used in place of each other.

Proportion of Income Spent

The proportion of total income spent on goods.

Luxury Goods

Goods that are not necessities.

Addictiveness

The degree of addiction associated with goods.

Time Taken

The time taken to make a purchase of goods.