Explain price elasticity of demand
Price elasticity of demand (PED) - the percentage change in quantity demanded, divided by the percentage change in price There are several factors that influence the elasticity of demand for a given product:1)The number of close substitutes2) The cost of switching between products3) The degree of necessity or whether the good is a luxury4) The proportion of a consumer's income allocated to spending on the good5)The time period allowed following a price change6) The breadth of definition of a good or service
MS
Related Economics GCSE answers
All answers ▸How does the exchange rate mechanism affect aggregate demand in the UK?
What factors can shift the demand curve in a market?
Define what market failure is and identify an example of market failure, explaining fully why it is a relevant example.
Using real life examples, explain the differences between the different market structures.