Price Elasticity of Demand

The price elasticity of demand (PED) measures the change in demand for a good in response to a change in price.

The price elasticity of demand (PED) is calculated by dividing the percentage change in quantity demanded by the percentage change in price.

The price elasticity of demand (PED) explains how much changes in price affect changes in quantity demanded.

A good's price elasticity of demand is largely determined by the availability of substitute goods.