Elasticity (Economics)
Sensitivity of quantity demanded/supplied to price changes.
Formula
PED = % Change in Quantity Demanded ÷ % Change in Price
Real World
When Netflix raised its UK monthly price from £10.99 to £17.99 in 2023, subscriber numbers barely fell — suggesting demand for streaming is price inelastic.
Exam Focus
Always state whether PED is elastic (>1) or inelastic (<1) and link directly to the revenue implication the question is asking about.
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