PED & YED

What does PED stand for?

• Price Elasticity of Demand
• Percentage Elasticity of Demand
• Product Elasticity of Demand
• Profit Elasticity of Demand

How is PED calculated?

• Percentage change in price over percentage change in quantity
• Percentage change in income over percentage change in quantity
• Percentage change in quantity over percentage change in price
• Percentage change in supply over percentage change in price

What does a negative PED indicate?

• Elastic demand
• Inelastic demand
• Unitary elastic demand
• Always negative due to inverse price-demand relationship

When is demand considered elastic?

• PED is smaller than 1
• PED is larger than 1
• PED equals 1
• PED equals 0

When is demand considered inelastic?

• PED is smaller than 1
• PED is larger than 1
• PED equals 1
• PED equals 0

What is unitary elastic demand?

• PED equals 0
• PED equals 1
• PED larger than 1
• PED smaller than 1

Primary commodities tend to have which type of PED?

• Elastic
• Inelastic
• Unitary
• Perfectly inelastic

Why are primary commodities often inelastic?

• Many substitutes
• They are essential inputs and lack substitutes
• Luxury items
• PED is close to 1

What happens to PED along a straight-line downward sloping demand curve?

• It remains constant
• It increases towards the upper end
• It decreases towards the lower end
• It varies along the curve

Where is demand usually inelastic on a demand curve?

• At the midpoint
• Upper portion of the curve
• Lower portion of the curve
• Along the entire curve