Negative Price Elasticity of Demand Value
An Negative Price Elasticity of Demand Value is a price elasticity of demand value with a negative elasticity value (that is, changes in price have a relatively small effect on the quantity of the good demanded).
- Context:
- It can range from being a Price Elastic Demand ([math]\displaystyle{ \lt-1 }[/math]) to being a Price Inelastic Demand ([math]\displaystyle{ \gt-1 }[/math]).
- Example(s):
- Inelastic Product Demand, such as an inelastic gasoline demand of -0.33.
- Inelastic Labor Demand.
- …
- Counter-Example(s):
- See: Price Elasticity Curve, Law of Demand.
References
2014
- (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/Price_elasticity_of_demand Retrieved:2014-11-29.
- Price elasticities are almost always negative … In general, the demand for a good is said to be inelastic (or relatively inelastic) when the PED is less than one (in absolute value): that is, changes in price have a relatively small effect on the quantity of the good demanded. The demand for a good is said to be elastic (or relatively elastic) when its PED is greater than one (in absolute value): that is, changes in price have a relatively large effect on the quantity of a good demanded. Revenue is maximized when price is set so that the PED is exactly one.
- http://www.economicshelp.org/blog/7019/economics/examples-of-elasticity/
- QUOTE: Price elasticity of demand measures the responsiveness of demand to a change in price. see: Price elasticity of demand
Price inelastic – a change in price causes a smaller % change in demand.
Price elastic – a change in price causes a bigger % change in demand. …
… We say a good is price inelastic, when an increase in price causes a smaller % fall in demand, e.g. if price of petrol falls 30%, but demand for petrol only increases 10% the PED = - 0.33 …
… We say a good is price elastic when an increase in prices causes a bigger % fall in demand. e.g. if price falls 20% and demand increases 80%, the PED = -4.0
- QUOTE: Price elasticity of demand measures the responsiveness of demand to a change in price. see: Price elasticity of demand
2012
- (Havranek et al., 2012) ⇒ Tomas Havranek, Zuzana Irsova, and Karel Janda. (2012). “Demand for Gasoline is more Price-Inelastic than Commonly Thought." Energy Economics 34, no. 1.