Price Elasticity of DEMAND

What does PED Mean

• Responsiveness of Quantity Supplied to change in price

• Responsiveness of Quantity Demanded to change in price

What does P in PASIFIC Stand for

• Population

• Price

• Price of Substitues

What does A in PASIFIC stand for

• Amount demanded

• Amount Supplied

• Advertising

What does S in PASIFIC stand for

• Subsidies

• Substitutes

• Supply

What does I in PASIFIC stand for

• Interest Rates

• Indirect Taxes

• Inelastic Demand

What does F stand for in PASIFIC

• Fashion And Tastes

• Foods and Substitutes

• Fashion and Trends

What does the second I in PASIFIC stand for

• Income

• Indirect Taxes

• Income Tax

What does C in PASIFIC stand for

• Cost of Complementary Goods

• Cost of Good

• Cost of Production

• Cost of Living

Whats the Equation for PED

• %Change in QD/% Change in price

• % Change in price/% Change in Direct Taxes

If Demand is Perfectly Inelastic...

• Change in price will have no affect on demand

• Increase in price will result in demand falling to 0

• Decrease in price results in infinite demand