What does PED mean in UNCLASSIFIED

Price elasticity of demand (PED) measures the responsiveness in quantity demanded of a good or service due to a change in its price. Put simply, PED tells us how much the quantity demanded increases or decreases when there's a change in price.

Price elasticity of demand (PED) is calculated by dividing the percentage change in quantity demanded by the percentage change in price. The resulting number will be either positive or negative, denoting an increase or decrease respectively when the price changes.

Yes. Different goods can have different PED values depending on factors such as product availability and substitutes available on the market. For example, luxury items like jewelry tend to have higher PED values than staple goods like eggs or milk because there are more substitutes for luxury items than for staples.

When a good has a low PED value, it means that there is relatively less responsiveness to price changes. This suggests that consumers are not very sensitive to changes in prices and do not substitute with similar goods if one rises in price; they are likely to remain loyal and keep buying the same product regardless of small changes in its cost.

A high PED indicates that consumers are more responsive to changes in prices and will likely substitute with similar goods if one rises in price. This means that they are more likely to switch away from the original product as soon as it becomes comparatively expensive due to external market factors such as inflation or taxes, making it less attractive than similar products offered by competitors at relative lower prices.

Businesses use information about PED to make informed decisions about pricing strategies; whether they bill increase their profits by raising prices, or keep them competitive by lowering them despite anticipated higher costs. Having up-to-date data on PED helps businesses make better decisions when setting their prices since they know exactly how customers would react should they alter their rates accordingly.

Cross elasticity of demand measures the degree to which demand for one good responds to a change in the price for another good (the substitute). It is usually measured using an equation where cross elasticity is equal to percentage change in quantity demanded for one product divided by percentage change in price for another substitutable product.

Yes, factors such as brand loyalty and quality differences between products often play significant roles and drastically alter results obtained from calculations using standard methods for measuring cross elasticities. As such these must be taken into account during analysis and interpretations accordingly made when drawing conclusions based on cross elasticities.