PED Interpretation
Understanding what PED values mean for business: If PED = -0.5 (inelastic), 10% price rise → only 5% demand fall (revenu...
Formula
PED = % change in quantity demanded ÷ % change in price
Real World
Apple raised iPhone prices significantly between the iPhone 13 and 14 series, yet global sales remained strong — demonstrating inelastic demand, with brand loyalty and limited substitutes keeping revenue rising.
Exam Focus
Link PED value to revenue impact: inelastic means price rise increases revenue; elastic means price rise decreases revenue.
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