Price Elasticity of Demand (PED)
PED is a measure of the sensitivity of the quantity variable, Q, to changes in the price variable, P. Elasticity answers the question of the percent by which the quantity demanded will change relative to (divided by) a given percentage change in the price. For infinitessimal changes the formula for calculating PED is the absolute value of (∂Q/∂P)×(P/Q).
Read more about this topic: Demand (economics)
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