Elastic demand: Above 1 is elastic Inelastic demand: Below 1 is inelastic
Substitute → Many substitutes increase elasticity Percentage of Income Luxury or necessity → Elastic for luxury, inelastic for necessity. Identity/brand → If brand loyalty is low then the product will be elastic Time
Calculating PED
Formula
Percentage change in quantity demanded / Percentage change in price
NOO - New Figure - Old Figure / Old Figure x 100