11762050
Description
Mind Map by Catherine Heath, updated more than 1 year ago
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Created by Catherine Heath
almost 7 years ago
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Price Elasticity of
Demand
- % change in demand/
% change in price
- Formula
- Formula
- Determinants
- Substitutes
- If there are lots of
substitutes available the
price is elastic
- If there are lots of
substitutes available the
price is elastic
- Necessity
- Luxurys are elastic
- Necessitys are inelastic
- Luxurys are elastic
- Habit
- Habit forming goodss,
such as cigarettes, are
price inelastic
- Habit forming goodss,
such as cigarettes, are
price inelastic
- Income
- Time
- Substitutes
- Responsiveness of demand to a change in price
- Unity
- P'eD=1
- P'eD=1
- Inelastic
- Demand not responsive to
change in price
- Raising prices increases
revenue
- Raising prices increases
revenue
- P'eD<1
- P'eD = 0
- Demand is
perfectly
inelastic
- Demand is
perfectly
inelastic
- P'eD = 0
- Demand not responsive to
change in price
- Elastic
- Demand responsive to
change in price
- Lowering prices increases
revenue
- Lowering prices increases
revenue
- P'eD>1
- P'eD=infinity
- Demand is
perfectly
elastic
- Demand is
perfectly
elastic
- P'eD=infinity
- Demand responsive to
change in price
- Unity
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