CIMA BA1 · Chapter 6 · Question 1 of 10
Price elasticity of demand is measured as:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Percentage change in quantity demanded divided by percentage change in price
Explanation
PED = % change in quantity demanded / % change in the good's own price. Using percentages makes the measure independent of units. Dividing by the percentage change in income gives income elasticity.
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