Glossary · Micro · Elasticity

Price elasticity of demand (PED)

How strongly quantity demanded responds to a change in price, measured as the percentage change in quantity divided by the percentage change in price. A PED of 2 means a 10 percent price rise cuts quantity by 20 percent.

Also called: PED, own-price elasticity, elasticity of demand

Taught in: What Is Price Elasticity?

Related terms

Elastic demandInelastic demandMidpoint formulaTotal revenue test

More from elasticity

Cross-price elasticity of demand (XED)Determinants of PEDDeterminants of PESIncome elasticity of demand (YED)Luxury good

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