... major shopping stores. P.e.d (Price elasticity of demand) is divined as the responsiveness of the quantity demanded of a good to changes in its own price. It is calculated by the equation :- P.e.d = % change in quantity demanded % change in price As I have found information figures when the Plastation1 went on sale and more recent figures, I have worked out the P.e.d for the Sony Plastation1. P.e.d = 0.91 The result shows the Sony Playstation1 is inelastic. This means the consumers are aware of changes in the price and reflect on them to whether or not they buy the product. Because of the quite neutral result of P.e.d it shows a balance between a large loss of sales or large gain. Uses of Price Elasticity of Demand * Its used to determine the pricing policy - if demand is price inelastic, firms will increase price to raise revenue; if demand is price elastic firms ...

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