PED

Question 1

What is PED

Answer 1

Price elasticity of demand: the responsiveness of demand for a product to a change in its price

Question 2

How do you measure PED

Answer 2

%change in demand / %change in price

Question 3

What is an elastic product

Answer 3

A product that is highly price sensitive

Question 4

What is an inelastic product

Answer 4

A product that is not very price sensitive >-1

Question 5

What is unitary price elastic

Answer 5

Change in price = same change in quantity demanded

Question 6

What factors affect PED

Answer 6

1) time
2) brand or product
3) number of similar products in the market
4) how essential the product is
5) price of the product in relation to the total incomes

Question 7

What is total revenue

Answer 7

Changing price can affect total revenue, businesses need to predict what will happen if price changes

Question 8

How do you measure total revenue

Answer 8

Quantity x price

Question 9

What affected would a higher selling price have on the products

Answer 9

Elastic= sales revenue will decrease 
Inelastic = sales revenue will increase

Question 10

What affect would a lower selling price have on the products

Answer 10

Elastic = sales revenue would decrease
Inelastic = sales revenue will increase