PED Quiz

What is PED?

• Equal to income

• Response to price changes in demand

• Impact of factors on ions

• Relationship between costs and income

What is the formula for PED?

• PED = Q / P

• PED = ΔQd / ΔP

• PED = (ΔQd / ΔP) × (P / Qd)

• PED = ΔP / ΔQd

If PED value > 1, demand is:

• Elastic

• Unit elastic

• Perfectly elastic

• Inelastic

If PED = 0, demand is:

• Perfectly inelastic

• Elastic

• Inelastic

• Unit elastic

If PED value ∞, demand is:

• Perfectly elastic

• Unit elastic

• Inelastic

• Perfectly inelastic

If PED = 1, demand is:

• Inelastic

• Perfectly elastic

• Unit elastic

• Perfectly inelastic

If PED value < 1, it is referred to as:

• Elastic

• Inelastic

• Unit elastic

• ∞ PED

If PED = 1, the demand is:

• Perfectly elastic

• Perfectly inelastic

• Unit elastic

• Not perfectly inelastic

If the PED value is < 1, it is referred to as:

• Elastic

• Inelastic

• Unit elastic

• ∞ PED

A very important factor in understanding PED is:

• Population

• Consumer income

• Availability of substitute goods

• Import tax