Microeconomics I: Supply & Demand - Utility and Elasticity - Price Elasticity of Demand

3 important questions on Microeconomics I: Supply & Demand - Utility and Elasticity - Price Elasticity of Demand

Where Q is quantity demanded, and P is price, what is the equation used to calculate PED?

Price Elasticity of Demand (PED) = % change in Q / % change in P

True or False. If demand is elastic, percentage change in Q should be greater than percentage change in P.

True

True or False. The demand in response to a price change is inelastic if PED is less than 1, and elastic if PED is greater than 1.

True

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