Price Elasticity of Demand (PED) measures how much the quantity demanded of a product changes when its price changes

Formula

PED= %CHANGE IN QUANTITY DEMANDED

% CHANGE IN PRICE

if the

price ⬆ demand ⬇

Microeconomics (Individual Level)

It studies the economic behavior of individuals, households, and firms.

Topics in Microeconomics

• Demand

• Supply

• Price determination

Objectives of Economics

The objectives of economics are the goals that an economy tries to achieve to improve the standard of living of people.

1. Economic Growth

• To increase the production of goods and services in a country.

• Higher production leads to higher income and better living standards.

2. Full Employment

1. Identifying Opportunities

• Studies market needs and customer problems.

• Searches for gaps in existing products/services.

• Observes trends and new demands in society.

• Converts ideas into workable business opportunities.

2. Organising Resources