Price elasticity of demand (PED)

?
View mindmap
  • Price elasticity of demand (PED)
    • Is a measure of the relationship between a change in the quantity demanded of a particular good and a change in its price.
    • % in quantity demanded / % in price
      • Elastic
        • A small change in price lead to a big change in demand
          • Luxury goods
        • Greater or equal to 1 is elastic
      • Inelastic
        • A meaningful change in price lead to a small change in demand
          • Goods that are needed for a day to day basis
        • Less than 1 is inelastic
    • Problems
      • Predicting Human behaviour
      • Interpreting data
      • Collecting data
    • Always negative

Comments

No comments have yet been made

Similar Business Studies resources:

See all Business Studies resources »See all Price elasticity of demand (PED) resources »