explain what is price elasticity of demand (PED)
answer structure: definition, equation/ graphs, explanationdefinition: PED measures the responsiveness of demand for a product to a change in its own priceequation: change in demand %/ change in price % (think: for each dollar increase in price, how much does demand fall)explanation: PED=0: demand is perfectly inelastic (graph: vertical demand curve), demand does not change when price changesPED=0-1: demand is inelastic (graph: flat demand curve)PED=1: demand is unit elastic (graph: slope of demand curve as 45 degrees), eg 15% increase in price leads to 15% fall in demandPED>1: demand is elastic (graph: steep demand curve), eg 15% increase in price leads to 30% fall in demand
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