Unit 2.5 · Elasticities of Demand
Price Elasticity of Demand (PED)
AO2AO4Diagram required
Syllabus Requirement
Measures the responsiveness of quantity demanded to a change in price.
Assessment Objectives
AO2Application and Analysis
AO4Use of Appropriate Skills
Summary
Price elasticity of demand (PED) measures how much the quantity demanded of a product changes in response to a change in its price. Understanding PED is important for businesses and policymakers as it helps predict consumer behavior when prices fluctuate.