PED and YED 5.0 / 5 based on 5 ratings ? Business StudiesMarketing and competitive environmentsASEdexcel Created by: Victor_GCreated on: 22-01-18 13:58 43856217 Across 1. Less than 1 but more than 0. As income grows, proportionally less is spent on necessities. E.g. staple groceries, own lable goods. (6, 9, 5) 7. The number is less than one. The % change in price will lead to a smaller % change in quantity demanded. (5, 9) Down 2. (% change in quantity demanded) / (% change in price) (3, 8) 3. YED more than 1. As income grows, proportionally more is spent on luxuries. E.g. expensive holidays, branded goods. (6, 6, 5) 4. (% change in quantity demanded) / (% change in income) (3, 8) 5. The number is bigger than 1. The % change in price will lead to a larger % change in quantity demanded. (5, 7) 6. These have a YED of less than one. For inferior goods as income rises, demand falls (consumers buy substitute products). (8, 5) 8. 1) Helps a business decide or know whether they should increase their price or not. 2) More substitutes = Price elastic 3) It's incorrect to say that all products that are highly branded are price inelastic. (3, 2, 3, 6)
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