The price elasticity of demand refers to the fact that
Answers
Price Elasticity of Demand (PED) is a method in economics which shows the demand quantity of a good or service, in response to a change in its price. PED is a percentage change in quantity demanded, when the price changes by one percent.
The demand is said to be ‘inelastic’ for a good or service when the PED is less than 1. When it is greater than 1, then the demand is said to be ‘elastic’.
The price elasticity of demand refers to the fact that an increment is supplied brings where there is a huge fall in price and a small increase in the quality demanded is seen.
It is responsive to the number of goods that are demanded by the consumers when a change in the price level occurs.
The formula of PED is the percentage of change in the quantity demanded by consumers divided by percentage change in the price of that particular good.