IED and XED
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Transcript of IED and XED
IED and XEDIED and XED
• Must know the formulae for income Must know the formulae for income elasticity of demandelasticity of demand and cross and cross price price elasticity of demandelasticity of demand
• Should understand what the different Should understand what the different values meanvalues mean
• Could be able to link IED and XED to Could be able to link IED and XED to specific examplesspecific examples
IEDIED
% Change in Quantity % Change in Quantity DemandedDemanded
% Change in Income% Change in Income IEDIED
+40 20
-10 20
+200 +20
Comparing PED and IEDComparing PED and IED
• Explain the PED values.Explain the PED values.• Explain the IED values.Explain the IED values.• Is there a relationship?Is there a relationship?
XEDXED
% Change in Quantity % Change in Quantity Demanded Good ADemanded Good A
% Change in Price % Change in Price Good BGood B
XEDXED
-20 -10
+20 -10
0 +20