2.2.1—PED, YED and XED
- Syllabus
- 9708–2026–2027
- Objective
- 2.2.1
- Level
- AS
PED, YED and XED measure different responses to changing conditions
Price elasticity of demand (PED) measures quantity demanded’s response to price; income elasticity (YED) measures response to income; cross elasticity (XED) measures response to another good’s price.
PED compares a good with its own price, YED with consumer income and XED with a related good. Keep the numerator and denominator matched to the concept.
A fall in the price of a product may change its quantity demanded (PED), while a rise in income may increase demand for a normal good (YED).
Elasticity is not a slope alone: it is a percentage response relative to a percentage change.
ConceptA-Level CAIE Economics AS