MYTUTOR SUBJECT ANSWERS

997 views

How do you calculate Price Elasticity of Demand

Price Elasticity of Demand (PED) calculates the responsiveness/sensitivity of the quantity demanded of a good or service to a change in price. 

The calculation for PED is therefore: the percentage change in quantity demanded divided by the percentage change in price.

If the resulting number is between 0 and 1, demand is inelastic, in other words it doesn't respond proportionally to a change in price. Inelastic goods often lack obvious substitute goods. Examples include petrol or salt.

If the resulting number is 1 or above then demand is elastic, in other words it responds more than proportionately to a change in price. Elastic goods often have clear substitutes or are non-essential. For example electronics such as TV's and phones could be described as having an elastic PED.

Daniel O. Mentoring -Oxbridge Preparation- tutor, Mentoring -Personal...

3 years ago

Answered by Daniel, an A Level Economics tutor with MyTutor


Still stuck? Get one-to-one help from a personally interviewed subject specialist

76 SUBJECT SPECIALISTS

PremiumGiulio P. GCSE Maths tutor, A Level Maths tutor, A Level Economics tu...
£36 /hr

Giulio P.

Degree: Mathematics (Masters) - Bristol University

Subjects offered:Economics, Physics+ 3 more

Economics
Physics
Maths
Italian
Further Mathematics

“Exam Time! I can provide a rapid revision class in any maths module which will test your son or daughter in all the fundamentals”

£26 /hr

Priya L.

Degree: Economics (Bachelors) - Warwick University

Subjects offered:Economics, Maths+ 1 more

Economics
Maths
Further Mathematics

“My goal is to elevate the confidence of students by ensuring they truly understand Maths at GCSE and A Level”

PremiumMegan J. A Level Business Studies tutor, GCSE Business Studies tutor,...
£24 /hr

Megan J.

Degree: BSc Business (Bachelors) - Lancaster University

Subjects offered:Economics, Extended Project Qualification+ 2 more

Economics
Extended Project Qualification
Business Studies
-Personal Statements-

“I study BSc Business at Lancaster University which is in the top 10 and the management school is triple accredited.”

About the author

£30 /hr

Daniel O.

Degree: Human, Social and Political Science with Management (Bachelors) - Cambridge University

Subjects offered:Economics, Politics+ 4 more

Economics
Politics
Government and Politics
Business Studies
-Personal Statements-
-Oxbridge Preparation-

“Second year Politics and International Relations student at Cambridge, I'm available to tutor GCSE and A-Level students in politics and economics.”

MyTutor guarantee

|  11 completed tutorials

You may also like...

Other A Level Economics questions

What is inflation?

What is Macroeconomics?

What is cost push inflation?

What are the likely impacts of a sustained budget deficit for an economy?

View A Level Economics tutors

We use cookies to improve your site experience. By continuing to use this website, we'll assume that you're OK with this. Dismiss

mtw:mercury1:status:ok