PRICE
10
20
30
1.
DEMAND
4,500
3,000
1,500
Price changes from $10 to $20. What is the price elasticity of demand?
At $10 revenue equals:
At $20 revenue equals:
TR = SP x Q
TR = SP x Q
=
=
=
=
To calculate PED:
PED = %∆QD / %∆P
Difference
Original
x 100%
Quantity:
x 100% =
=
Price:
x 100% =
Learn this method of how to calculate the elasticity, and then you can do it for PES
The rules for PED are:
2. Price changes from $350 to $450.
PRICE
250
350
450
DEMAND
800
600
400
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3. Price changes from $100 to $125.
PRICE
100
125
150
DEMAND
8,000
7,000
6,000
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4. Price changes from $200 to $250.
PRICE
200
250
300
DEMAND
5,000
3,000
1,000
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