1. PED, YED, XED Classifications
Carter Waterkeyn
AICE ECONOMICS

2. PED PED > 1 Luxury PED< 1 Necessity
PED= close to infinite is perfectly elastic
PED> 1 Relative Elastic
PED= 1 Unitary elastic
PED< 1 Relatively Inelastic
PED= 0 Perfectly Inelastic

3. Objective 1: Income elasticity – a summary
Income elasticity of demand > 1
Normal, luxury good
Income elastic
Income elasticity of demand is
a positive number less than 1.
Normal, necessity
Income inelastic
Income elasticity = 1
Normal
Unit income elastic
Income elasticity of demand is a
a negative number.
Inferior good

4. Objective 1: Cross Price elasticity – a summary
Cross price elasticity of demand between X and Y is a positive number.
X and Y are substitutes
Cross price elasticity of demand between X and Y is a negative number.
X and Y are complements
Cross price elasticity of demand between X and Y is zero.
X and Y are unrelated