Price elasticity demand

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Price
Elas+city
of
Demand

EdExcel
Economics
1.2.3

What
is
Price
Elas+city
of
Demand?

•  Price
elas4city
of
demand
(PED)
measures
the
...

Price
Elas+city
of
Demand
in
Ac+on

WH
Smith
have
recently
reduced

the
price
of
...

Numerical
Values
for
Coeﬃcient
of
Price
Elas+city

1.  If
Ped
=
0
demand
is
perfect...

What
factors
determine
the
PED
of
a
product?

Number
of
close
subs+tutes
available
...

Inelas+c
Demand
(Ped
<
1)

•  Following
a
change
in

price,
the
total
revenue

earn...

Example
of
Inelas+c
Demand
–
Rare
Earths

•  China
is
the
dominant
supplier

of
rar...

Elas+c
Demand
(Ped
>
1)

•  If
demand
for
a
product
is

price
elas4c,
a
supplier...

Perfectly
Inelas+c
Demand
(Ped
=
0)

•  A
perfectly
inelas4c

demand
curve
is
an

e...

Perfectly
Elas+c
Demand
(Ped
=
inﬁnity)

•  If
demand
is
perfectly

elas+c,
a
change
...

Unitary
Elas+c
Demand
(Ped
=
1)

•  With
a
demand
curve
of

unitary
price
elas+city...

Co-‐Eﬃcient
of
PED
along
a
linear
demand
curve

•  Price
elas4city
of
demand

along
...

Usefulness
of
Price
Elas+city
of
Demand
for
Producers

Firms
can
use
PED
es4mates
t...

Price
Elas+city
in
Ac+on:
Uber
and
Surge
Pricing

Surge
Pricing

Peak
Demand

•  Uber ...

Cri+cal
Awareness:
Limita+ons
of
Elas+ci+es

Problems
with

inaccurate
or

incomplete
data
...

Price
Elas+city
of
Demand

EdExcel
Economics
1.2.3

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