PED + YED

PED + YED

1. Price elasticity of Demand= the relationship between the change in price and the demand for the product

   • Inelastic= demand doesn't change at all/much when price changes (0-1%)
   • Elastic= demand changes by more than 1% due to price changes

2. Income elasticity of Demand= the relationship between the change in consumers' incomes and the demand for the product

   • Elastic= the change in income affects the demand by more than 1%
   • Inelastic= There is no/ little change in demand due to the changes in consumer's income