Cambridge AS & A Level Economics
2.2Price elasticity, income elasticity and cross elasticity of demand
Price elasticity, income elasticity and cross elasticity of demand in Cambridge AS & A Level Economics: what the syllabus expects you to know, the learning objectives and how to practise.
Subtopic67 practice questions3 lessons
Learning objectives
What the syllabus expects you to be able to do.
- 2.2.1Define PED, YED and XED.
- 2.2.2State the formulae for and calculate PED, YED and XED.
- 2.2.3Explain the significance of relative percentage changes and of the size and sign of each coefficient.
- 2.2.4Describe elasticity values: perfectly elastic, highly elastic, unitary, highly inelastic and perfectly inelastic.
- 2.2.5Explain how PED varies along a straight-line demand curve.
- 2.2.6Explain the factors affecting PED, YED and XED.
- 2.2.7Explain the relationship between PED and total expenditure on a product.
- 2.2.8Explain the implications of PED, YED and XED for decision-making.
Lessons
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Income elasticity and cross elasticity of demand
40 min
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PED, total revenue and pricing decisions
45 min
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Price elasticity of demand: measuring and interpreting responsiveness
45 min
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Sample question
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Turn Price elasticity, income elasticity and cross elasticity of demand into a strength.
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