PED (Price Elasticity of Demand) Flashcards Preview

Edexcel Business A level Unit 1 > PED (Price Elasticity of Demand) > Flashcards

Flashcards in PED (Price Elasticity of Demand) Deck (9)
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1

What is demand:

Demand is the amount of a product that consumers are willing and able to purchase at any given price

2

What does PED stand for:

Price Elasticity of Demand

3

Define what is PED:

PED represents the impact of that a change in price will have on the demand for a product.

4

What does price elastic mean:

It means that demand is largely affected when there is a change in price

5

What does price inelastic mean:

It means that demand isn't largely affected when the price changes.

6

How to calculate PED:

Percentage change in quantity demanded divided by percentage change in price

7

How to calculate percentage change in quantity demanded and percentage change in price:

difference between the 2 numbers divided by original number x 100

8

How to interpret price elasticity:

If the PED figure you get is greater than 1, then the product is price elastic. So if the PED figure is -2.5 then it is inelastic

9

What are some factors influencing PED:

TIme
Competitiion
Branding
The proportion of income spent on a product - for high price products which attract wealthy consumers, they are likely to be inelastic.