What is elasticity?

What is price elasticity of demand (PED)?

What happens to a good if it is price elastic?

What happens to a good if it is price inelastic?

Why is the sign of PED usually negative?

What is the range of values for a price inelastic demanded good? And describe.

What is the range of values for a price elastic demanded good? And describe.

What are the 3 special cases of PED and demand curves?

PED varies along a curve. Where along the curve is a good price elastic?

Where along the curve is the price inelastic?

Where along the demand curve is there unit elastic demand?

What are the 4 determinants of price elasticity of demand?

Describe the number and closeness of substitutes and its relationship to PED

ylDescribe the concept of necessities vs luxuries and their relationship to PED

Describe time period and its relationship with PED

Describe proportion of income spent on a good and its relationship to PED

What is total revenue?

Describe the effects on revenue when the demand is elastic.(PED>1)

Describe the effects of revenue when the demand is inelastic (0<PED<1)

Describe the effects of revenue when the demand is unit elastic (PED=1)

What should a firm do if they want to increase their revenues and their product is demand inelastic?

What should a firm do if they want to increase their total revenues and their product is demand elastic?

Why do many primary commodities have a lower PED in comparison to a PED of a manufactured good?

Why do primary commodities that have inelastic demand and fluctuations in supply cause problems for primary producers?

Why do governments have to consider the PED of the goods being taxed before taxing the good?