Elasticity

Question 1

What is Elasticity?

Answer 1

Elasticity measures the responsiveness of demand to a change in relevant variable - such as price or income.

Question 2

What is price elasticity if demand?

Answer 2

Price elasticity of demand measures the extent to which the quantity of a product demanded is affected by a change in price?

Question 3

What can we call Price Elasticity of Demand?

Answer 3

PED

Question 4

PED formula?

Answer 4

%Change in Quantity Demanded
———————————————-
%Change in Price

Question 5

How do you know the price elastic?

Answer 5

If the number is greater than 1.

Question 6

How do you know the price in elastic?

Answer 6

If number is less than 1

Question 7

If the value of PED is more than 1 what is the interpretation of the elasticity?

Answer 7

Change in demand is more than the change in price.

Question 8

If the value of PED is less than 1 what is the interpretation of the elasticity?

Answer 8

Change in demand is less than the change in price.

Question 9

If the value of PED is exactly 1 what is the interpretation of the elasticity?

Answer 9

Change in demand is equal to the change in price