EconomicsAQA (7136) / Edexcel (9EC0)Microeconomics

Price Elasticity of Demand — A-Level Economics

Q: What are the main determinants of price elasticity of demand?

The main determinants are: availability of substitutes (more substitutes = more elastic), proportion of income spent on the good, necessity vs luxury, brand loyalty, time period (demand tends to be more elastic in the long run), and habit-forming nature of the product.

Q: How does PED affect total revenue?

If demand is price elastic (PED > 1), a price decrease increases total revenue because the percentage rise in quantity demanded outweighs the percentage fall in price. If demand is price inelastic (PED < 1), a price increase raises total revenue.

AQA / Edexcel A-Level Economics

Price Elasticity of Demand (PED) measures the responsiveness of quantity demanded to a change in price — one of the most frequently examined concepts in A-Level Economics. This interactive tool lets you adjust percentage changes in price and quantity demanded to calculate PED, classify demand as elastic (PED > 1), inelastic (PED < 1), or unit elastic (PED = 1), and explore how elasticity affects total revenue. Includes determinants of PED, real-world examples, and practice calculations aligned to AQA and Edexcel specifications.

Uses Google Fonts (Cormorant Garamond, Inter Tight). Requires an internet connection for full styling.

Frequently asked questions

What are the main determinants of price elasticity of demand?+

The main determinants are: availability of substitutes (more substitutes = more elastic), proportion of income spent on the good, necessity vs luxury, brand loyalty, time period (demand tends to be more elastic in the long run), and habit-forming nature of the product.

How does PED affect total revenue?+

If demand is price elastic (PED > 1), a price decrease increases total revenue because the percentage rise in quantity demanded outweighs the percentage fall in price. If demand is price inelastic (PED < 1), a price increase raises total revenue.

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