The responsiveness of the quantity demanded to a change in the price of the product.
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PED is measured by which formula?
% change in quantity demanded/% change in price
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PED greater than 1 is ?
Elastic
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PED less than 1 is?
Inelastic
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PED = 1 is?
Unit elastic
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When calculating a percentage change, remember to?
Divide the change by the original figure
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What is a substitute?
An alternative to a particular product
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The greater the number of substitutes and the greater their closeness, then the likelihood is that such a product will be?
Price elastic
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If a product takes a very small proportion of a persons income e.g. a banana - demand is likely to be ?
Price inelastic
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If a product takes up a very large proportion of a persons income e.g. a holiday, demand is likely to be?
Price elastic
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If a good is broadly defined i.e. the demand for petrol or meat, demand is often?
Price inelastic
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In the short term, most consumers find it ____ to alter their spending habits - this means they are quite likely to continue to purchase a product despite a price increase.
Difficult
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Over time, as consumers find out more about possible ________, demand for a product is likely to be more _____ ____.
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