Price Elasticity Of Demand

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  • Price Elasticity Of Demand
    • Factors affecting demand
      • Income
      • Price of substitutes
      • Advertising
      • Seasonal
      • Price
    • Elastic/Inelastic
      • Demand is price elastic when it is greater than 1
      • Demand is price inelastic when it is less than 1
    • Price Elasticity & Sales Revenue
      • If the price is elastic, then putting up the price will lead to a fall in sales revenue
      • If the price is inelastic, then putting up the price will lead to an increase in sales revenue
    • Equations
      • Price elasticity of demand = % change in quantity of demand over % change in price
      • % change = newest figure - original. then difference over original

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