Question

Explain how the elasticity coefficient can be used to determine the degree of elasticity of demand

Answer 1

Answer:

 A PED coefficient equal to one indicates demand that is unit elastic; any change in price leads to an exactly proportional change in demand (i.e. a 1% reduction in demand would lead to a 1% reduction in price). A PED coefficient equal to zero indicates perfectly inelastic demand.

Answer 2

Answer:

A PED coefficient equal to one indicates demand that is unit elastic; any change in price leads to an exactly proportional change in demand (i.e. a 1% reduction in demand would lead to a 1% reduction in price). A PED coefficient equal to zero indicates perfectly inelastic demand