ped/yed

• Elasticity 


  • responsiveness of demand to change in variable (eg. Price & income)
• PED calc 


  • % change in quantity demanded / % change in price
• Factors influencing PED

  • brand strength
  • necessity
  • habit
  • availability of substitutes
  • time
• Price elastic - change in demand
• Price inelastic - no change in demand
• PED>1

  elastic
• PED<1

  Inelastic
• YED def

  • measures responsiveness of demand to change in income
• YED calc

  % change in quantity demanded / % change in income