Month: May 2018

Watch “Price Elasticity of Demand – part 1” on YouTube

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https://www.ocr.org.uk/qualifications/as-a-level-gce-economics-h060-h460-from-2015/delivery-guide/delivery-guide-ecdg002-competitive-markets/delivery-guide-group-ecdg002mdg004-elasticity
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Microeconomics: How competitive markets work > Elasticity 

Learners should be able to: 

  • explain what is meant by elasticity 
  • explain what is meant by price elasticity of demand (PED) 
  • calculate PED using point elasticity 
  • explain, with the aid of a diagram, the different values of PED 
  • explain why price elasticity of demand varies along a straight line demand curve 
  • explain, with the aid of a diagram, the relationship between PED and a firm’s total revenue 
  • evaluate the factors which determine the degree of PED 
  • evaluate the effect of PED on the impact of an indirect tax and of a subsidy 
  • explain what is meant by income elasticity of demand (YED) 
  • calculate YED 
  • evaluate the significance of the numerical value and sign of YED 
  • explain the difference in YED of inferior, normal and superior goods 
  • explain what is meant by cross elasticity of demand (XED) 
  • calculate XED 
  • evaluate the significance of the numerical value and sign of XED 
  • explain the difference in XED of substitute, complementary and non-related goods 
  • explain what is meant by price elasticity of supply (PES) 
  • calculate PES using point elasticity 
  • explain, with the aid of a diagram, the different values of PES 
  • evaluate the factors which determine the degree of price elasticity of supply 
  • evaluate the usefulness of and significance of PED, YED, XED and PES to all economic agents.