Price Elasticity of Demand (PED)

A typical 4-mark "calculate PED" question rewards a clear three-step method plus a one-line interpretation.

Step 1. Calculate the percentage change in quantity demanded.

Step 2. Calculate the percentage change in price.

Step 3. Divide: PED = %ΔQd ÷ %ΔP.

Step 4. Interpret the result: say whether demand is elastic (|PED| > 1) or inelastic (|PED| < 1), and what that means for total revenue.