Explore & Learn

Karthikeyan A · 2024-11-15T09:40:44.997Z

#economics #priceelastcityofdemand • The law of demand states that when there is an increase in price, there will be a fall in quantity demanded. * Economists are interested by how much the quantity demanded will fall. • Price elasticity of demand reveals how responsive the change in quantity demanded is to a change in price. * The responsiveness is different for different types of products. Calculation of PED • PED can be calculated using the following formula: • To calculate a % change, use the following formula:

Search, Explore, Share & Discuss your passionate topics.

A dog family which has torn apart. In one day

Karthikeyan A

Nov 281 min read

A mother can take care of ten children but ten children can't take care of one mother.

Eshaaan

Nov 281 min read

An animal with four legs

Karthikeyan A

Nov 262 min read

Why you should be kind to people

Eshaaan

Nov 181 min read

1

2 3 4 5

Advance Group

Primary Group

Primary Learning Plan

Topics to Learn

Kids Activities

Kids Addition

Common

Online Resources

Drive

Update Summary

Team Members

Academic

Attendance

INWFHOUTLEAVE

Submitted

To test this feature, visit your live site.

Karthikeyan A

Nov 15

The Definition and Calculation of PED

in Karthikeyan

#economics #priceelastcityofdemand

The law of demand states that when there is an increase in price, there will be a fall in quantity demanded.
* Economists are interested by how much the quantity demanded will fall.
Price elasticity of demand reveals how responsive the change in quantity demanded is to a change in price.
* The responsiveness is different for different types of products.

Calculation of PED

PED can be calculated using the following formula:

To calculate a % change, use the following formula:

2 comments

Comments (2)

Anitha

Nov 15

1. What does the law of demand state about the relationship between price and quantity demanded?

2. What does price elasticity of demand (PED) measure in economics?

3. Why is the responsiveness of quantity demanded to price changes different for various products?

4. What is the formula for calculating price elasticity of demand (PED)?

5. How do you calculate the percentage change in price or quantity when finding PED?

Karthikeyan A

Nov 18

Replying to

The law of demand posits that the price of an item and the quantity demanded have an inverse relationship. Essentially, it tells us that people will buy more of something when its price falls and vice versa. When graphed, the law of demand appears as a line sloping downward.
The price elasticity of demand (PED) is a measure of how much the quantity demanded changes with a change in price.
The responsiveness of quantity demanded to price changes varies between products because of several factors, including:
Availability of substitutes
Importance to household budgets
Type of good
Brand recognition.
Price Elasticity of Demand = % Change in Quantity Demanded / % Change in Price. Where: % Change in Quantity Demanded: This is the percentage change in the amount of goods or services that consumers are willing to purchase. It's calculated as New Quantity/Old Quantity – 1.
Calculate percentage change in price - (New price minus Old price / Old price) x 100. Divide percentage change in quantity by percentage change in price - Remember to include minus signs.