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Economics_A-level_Edexcel

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  1. 1-1-nature-of-economics
    6 主题
  2. 1-2-how-markets-work
    10 主题
  3. 1-3-market-failure
    4 主题
  4. 1-4-government-intervention
    2 主题
  5. 2-1-measures-of-economic-performance
    4 主题
  6. 2-2-aggregate-demand-ad
    5 主题
  7. 2-3-aggregate-supply-as
    3 主题
  8. 2-4-national-income
    4 主题
  9. 2-5-economic-growth
    4 主题
  10. 2-6-macroeconomic-objectives-policies
    4 主题
  11. 3-1-business-growth
    3 主题
  12. 3-2-business-objectives
    1 主题
  13. 3-3-revenues-costs-and-profits
    4 主题
  14. 3-4-market-structures
    7 主题
  15. 3-5-labour-market
    3 主题
  16. 3-6-government-intervention
    2 主题
  17. 4-1-international-economics
    9 主题
  18. 4-2-poverty-inequality
    2 主题
  19. 4-3-emerging-developing-economies
    3 主题
  20. 4-4-the-financial-sector
    3 主题
  21. 4-5-role-of-the-state-in-the-macroeconomy
    4 主题
  22. 5-1-the-exam-papers
    3 主题
  23. 5-2-economics-a-level-skills
    1 主题
  24. 5-3-structuring-your-responses
    9 主题
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Price Elasticity of Demand (PED)

  • The law of demand states that when there is an increase in price, there will be a fall in quantity demanded

    • Economists are interested by how much the quantity demanded will fall

  • Price elasticity of demand reveals how responsive the change in quantity demanded is to a change in price

    • The responsiveness is different for different types of products

Calculation of PED

  • PED can be calculated using the following formula:

text PED = end text fraction numerator percent sign space change space in space quantity space demanded over denominator percent sign space change space in space price end fraction space equals space fraction numerator percent sign triangle space in thin space QD over denominator percent sign triangle in space straight P end fraction

  • To calculate a % change, use the following formula:

percent sign space Change space equals space fraction numerator new space value space minus space old space value over denominator old space value end fraction space cross times space 100 

Worked Example

A firm raises the price of its products from £10 to £15. Its sales fall from 100 to 40 units per day. Calculate the PED of its products

Step 1: Calculate the % change in QD

percent sign triangle QD space equals space fraction numerator 40 minus 100 over denominator 100 end fraction space cross times 100 percent sign triangle QD space equals space minus 60 percent sign 

Step 2: Calculate the % change in P

<img alt=”percent sign triangle straight P space equals space fraction numerator 15 space minus space 10 over denominator 10 end fraction space straight x space 100 percent sign triangle straight P space equals space 50 percent sign” data-mathml='<math style=”font-family:Arial” ><semantics><mstyle mathsize=”14px”><mo>%</mo><mo>△</mo><mi mathvariant=”normal”>P</mi><mo> </mo><mo>=</mo><mo> </mo><mfrac><mrow><mn>15</mn><mo> </mo><mo>-</mo><mo> </mo><mn>10</mn></mrow><mn>10</mn></mfrac><mo> </mo><mi mathvariant=”normal”>x</mi><mo> </mo><mn>100</mn><mspace linebreak=”newline”/><mspace linebreak=”newline”/><mo>%</mo><mo>△</mo><mi mathvariant=”normal”>P</mi><mo> </mo><mo>=</mo><mo> </mo><mn>50</mn><mo>%</mo></mstyle><annotation encoding=”application/

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