Economics - Elasticity - PED

Which is the correct definition of demand?

• The quantity of a product that consumers are willing and able to demand at a given price.

• The quantity of a product that consumers are willing and able to purchase at a given prices at a given period of time.

• The quantity of a product that suppliers are willing and able to supply at a given price at a given period of time.

• The amount of a given product or service that suppliers are willing to offer to consumers at a given price level at a given period.

For normal goods, as price increases demand will typically.....

What is the definition of price elasticity of demand?

• The amount that price changes when demand changes

• The change in demand that impacts on price changes

• The responsiveness of consumer demand to a change in the price of a good or service

• The responsiveness of price to a change in consumer demand

What is the equation for PED?

• $\%\ Change\ in\ quantity\ demanded\ \div\ \%\ Change\ in\ income$

• $\%\ Change\ in\ price\ \div\ \%\ Change\ in\ quantity\ demanded$

• 
  

  $\%\ Change\ in\ quantity\ demanded\ \div\ \%\ Change\ in\ price$
  

For normal goods, the PED number will always be ..................

If PED > 1, demand for a good is said to be price.....

If PED is -2.5, then a 1% change in price will lead to what impact on quantity demanded?

• Change of 25%

• Change of 2.5%

• Change of 0.25%

If a company has a good with a price elasticity of demand which is elastic, how should it maximise profits?

• High prices

• Low prices

If PED < 1, then demand for the good is said to be price .........

If PED is -0.4, then a 1% change in price will lead to what impact on quantity demanded?

• Change of 4%

• Change of 14%

• Change of 0.4%