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equilibrium price
demand = supply
disequlibrium
demand ≠ supply (excess supply or demand)
why is there price changes?
changing market conditions
example of the effect on equilibrium price when the demand for oil has decreased
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formula for price elasticity of demand (PED)
% change in quantity demanded/ percentage change in price
price elasticity of demand
a measure of the resposiveness of athe quantity demanded to a change in price
elastic demand
when the quantity demanded changes by a greater percentage than the change in price
inelastic demand
when the quantity demanded changes by a smaller percentage than the change in price
determinants of PED
availability of substitutes, proportion of income spent on the product, how the market is defined, is it a necessity or a luxury
