Flashcards
Elasticities
Cards in this deck (10)
- 1What is PED?PED is a measure of the responsiveness of the quantity demanded of a product when there is a change in price of that product.
- 2What is the equation for PED?%change in quantity demanded/
%change in Price - 3Define perfectly inelasticPED is perfectly inelastic when a change in the price of the product leads to no change in the quantity demanded. PED is 0
- 4Perfectly elasticPED is perfectly elastic when a change in the price of a product leads to a complete change in quantity demanded
- 5Unit elastic demandWhen a change in the price of a product leads to a proportional change in the quantity demanded. PED=1
- 6Inelastic demandWhen a change in the price of a product leads to a less than proportional change in the quantity demanded of that product. 1>PED>0
- 7Elastic demandWhen a change in the price of a product leads to a greater than proportional change in the quantity demanded of that product. PED>1
- 8The determinants of PED1. Degree of necessity
2. The closeness and availability of substitutes
3. The proportion of income spent on the product
4. The time period considered - 9Define YEDYED is the measure of responsiveness of quantity demanded when there is a change of incomes within an economy
- 10—
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- International Baccalaureate (IB) economics Flashcards on Elasticities, created by Annabelle Boamah on 17/11/2020.
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- Annabelle Boamah
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