The proportionate change of the quantity demanded of a good in response to a proportionate change in price.
A good is classified as inelastic if it has a PED value that it less than 1.
A good is classified as elastic if it has a PED value that is greater than 1.
A good is classified as unit elastic if it has a PED value that is equal to 1.
The value of the PED for a good determines the type (slope and position) of demand curve in the market.
