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2.6. Price elasticity of demand (PED)

Syllabus
0455–2027–2028
Topic
2.6
Level
—

2.6.1—Definition of PED

  • Definition of PED

2.6.2—Calculation of PED

  • calculation of PED using the formula
  • interpretation of the significance of the PED value: perfectly inelastic, inelastic, unitary, elastic, perfectly elastic
  • drawing and interpretation of demand curve diagrams to show different PED

2.6.3—Determinants of PED

  • main influences on whether demand is elastic or inelastic

2.6.4—PED, consumer expenditure and firms’ revenue

  • effect of price changes on the amount spent by consumers and revenue raised by firms, shown both in a diagram and as a calculation
  • relationship between PED and the amount spent by consumers and revenue raised by firms

2.6.5—Significance of PED

  • implications of PED for decision-making by consumers, workers, producers/firms and government

Objective notes

5 learning objectives
ConceptIGCSE Economics