ped

• What does a Ped value of 0 indicate about demand?

  Demand is perfectly inelastic
• What does it mean when demand is perfectly inelastic?

  Demand does not change with price changes
• What is the shape of the demand curve when demand is perfectly inelastic?

  The demand curve is vertical
• What does a Ped value between 0 and 1 indicate about demand?

  Demand is inelastic
• How does inelastic demand respond to price changes?

  Demand changes less than price changes
• What does a Ped value of 1 signify about demand?

  Demand is unitary elastic
• What happens to total spending when demand is unitary elastic?

  Total spending remains the same at each price level
• If the price rises by 15%, what happens to demand under unitary elasticity?

  Demand contracts by 15%
• What does a Ped value greater than 1 indicate about demand?

  Demand is elastic
• If a 10% price increase leads to a 30% drop in demand, what is the price elasticity of demand?

  -3
• What does a Ped value of infinity indicate about demand?

  Demand is perfectly elastic
• What characterizes perfectly elastic demand?

  Buyers purchase all at a given price
• What happens to demand at prices higher than the given price in perfectly elastic demand?

  Demand drops to zero