Important equations for Unit 1

All the equations you should need for the first Unit of economics. EDEXCEL!

HideShow resource information

Price Elasticity of Demand

PED = % change in Qd ÷ % change in Price

PED < 1 = Inelastic

PED > 1 = Elastic

Definition: the responsiveness of demand to change in price

1 of 4

Income Elasticity of Demand

YED = % change in Qd ÷ % change in Income

YED is positive = Normal Goods

YED is negative = Inferior Goods

YED > 1 = Luxury goods

Definition: the responsiveness of demand to change in income

2 of 4

Cross Elasticity of Demand

XED = % change in Qd (for good A) ÷ % change in Price (for good B)

XED is positive = Substitue goods

XED is negative = Complementary goods

XED is 0 = No relationship

Definition: the responsiveness of demand of one good to the changes in price of another

3 of 4

Price Elasticity of Supply

PES = % change in Qs ÷ % change in Price

PES < 1 = Inelastic

PES > 1 = Elastic

Definition: the responsiveness of supply to change in price

(Exactly like PED basically, but put supply in the place of demand!)

4 of 4

Comments

No comments have yet been made

Similar Economics resources:

See all Economics resources »See all resources »