Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
8 Cards in this Set
- Front
- Back
|
Price elasticity of demand |
Measures the responsiveness of the quantity demanded for a good or service to a change in price |
|
|
Price elastic demand |
Good is very responsive to a change in price, PED>1 |
|
|
Price inelastic demand |
The goods demand is not very responsive to a change in price, PED<1 |
|
|
Unitary elastic demand |
Change in price is directly proportional to the change in demand |
|
|
Perfectly inelastic demand |
Change in price has no impact on demand, PED=0 |
|
|
Perfectly elastic demand |
Demand is totally responsive to a change in price, PED=infinite |
|
|
Total revenue |
Price per unit x quantity sold |
|
|
6 factors influencing PED |
-Substitute availability -Luxury/ necessity -Proportion of income spent on good -addictiveness -Time period -Branding
|
