Economics

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Check your understanding of elasticity of demand and supply with this updated quizlet revision activity!

Here are some key terms to revise!

Elastic supply: When PES has a coefficient >1
Factor making demand income elastic: Luxury / premium product e.g. designer clothing
Factor making demand income inelastic: Staple product seem as a necessity e.g. toothpaste
Factor making demand price elastic: Many close substitutes in a market and very low switching costs between competing brands
Factor making demand price inelastic: High cost of switching supplier & habitual purchase
Factor making supply price elastic: High level of unsold stocks
Factor making supply price inelastic: Low level of spare production capacity
Inelastic demand: When PED has a coefficient <1
Perfectly elastic demand: A market with many perfect substitutes
Perfectly elastic supply: When PES = infinity
Perfectly inelastic demand: When PED = zero
Unitary elasticity: When coefficient of elasticity = 1

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Boston House,
214 High Street,
Boston Spa,
West Yorkshire,
LS23 6AD

Tel: +44 0844 800 0085