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PED

This topic has 3 replies, 2 voices, and was last updated 3 years ago by John Moffat.

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November 13, 2021 at 11:24 am #640551
Syed Ahsan Ali
Participant
- Topics: 136
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Sir, I have a question that :
if PED > 1 then it is demand elastic
if PED < 1 then it is demand inelastic
BUT the notes say that HIGH PED is elastic and LOW PED is inelastic so how do we know that it is high PED or low PED (as compared to what?)
November 13, 2021 at 5:12 pm #640575
John Moffat
Keymaster
- Topics: 57
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Compared to nothing. There is no sort of ‘cut-off’ !!
November 13, 2021 at 5:57 pm #640580
Syed Ahsan Ali
Participant
- Topics: 136
- Replies: 85
Sorry but I don’t understand what u said. Compared to nothing then how do we know whether the demand is elastic or inelastic based on PED.
I have a book that says::
if PED > 1 then it is demand elastic
if PED < 1 then it is demand inelastic
How do we know finally whether the PED is high and elastic or it is low and inelastic???
November 14, 2021 at 7:29 am #640591
John Moffat
Keymaster
- Topics: 57
- Replies: 54699
But you have answered your own question.
If it is more than 1 then it is elastic, and the more it is above 1 then the more elastic it is.
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