PED DP1

What does PED stand for?

• Price Elasticity of Demand
• Price Efficiency of Demand
• Price Elasticity of Difference
• Percentage Elasticity of Demand

How is PED calculated?

• Percentage change in price / percentage change in quantity
• Percentage change in quantity / percentage change in price
• Price / Quantity
• Quantity / Price

What does a PED greater than 1 indicate?

• Inelastic demand
• Elastic demand
• Unitary elastic demand
• Perfectly elastic demand

If PED is less than 1, the product is considered?

• Elastic
• Inelastic
• Unitary elastic
• Perfectly inelastic

When PED is equal to 1, the demand is?

• Elastic
• Inelastic
• Unitary elastic
• Perfectly inelastic

A necessity good typically has which kind of demand?

• Elastic
• Inelastic
• Unitary elastic
• Perfectly inelastic

Luxury goods usually have what kind of PED?

• Inelastic
• Elastic
• Unitary elastic
• Perfectly elastic

What happens to total revenue when price increases for an inelastic product?

• It decreases
• It increases
• It stays the same
• It fluctuates

What happens to total revenue when price decreases for an elastic product?

• It decreases
• It increases
• It stays the same
• It fluctuates

Which factor leads to an inelastic PED: necessity or luxury?

• Luxury
• Necessity
• Price
• Demand