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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 |
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Price elastic demand |
Good is very responsive to a change in price, PED>1 |
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Price inelastic demand |
The goods demand is not very responsive to a change in price, PED<1 |
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Unitary elastic demand |
Change in price is directly proportional to the change in demand |
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Perfectly inelastic demand |
Change in price has no impact on demand, PED=0 |
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Perfectly elastic demand |
Demand is totally responsive to a change in price, PED=infinite |
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Total revenue |
Price per unit x quantity sold |
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6 factors influencing PED |
-Substitute availability -Luxury/ necessity -Proportion of income spent on good -addictiveness -Time period -Branding
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