Question

Define and illustrate the concept of Price Elasticity of Demand (PED) and explain the reason why different methods are used in order to measure it.

Answer 1

Price elasticity of demand is a measure between a change in the quantity demanded of a particular good and a change of price of a good i.e when a particular good is in high demand or low demand then what will it affect on its pricing

It is calculated by dividing the change in quantity demanded by the change in price of a good.

Ped=change in quantity/change in price.

Ped measure the response of customer when price changes