DEMAND 

the quantities that people are willing and able to buy at varies quantities 

 

Elastic demand                                                             Inelastic demand

demand that is very sensitive to change in price E>1        demand that is not very sensitive to change E<1

 Price Elasticity of Demand(PED)

               1. calculate the quantity- New quantity - old quantity / old quantity

                              2. calculate the price- New price - Old price / old price

                              3.PED- % change in quantity/% change in price

What causes a change in demand 

1. change in price

2.change in buyers taste

3.change in # of buyers

4.change in the price of related goods

5.change in income

6.change in exceptions