Groundlearn / Glossary / Price elasticity of demand
Price elasticity of demand
Also called elasticity. A CFA term, defined in plain English with the distinction examiners test.
What it means
The percentage change in quantity demanded for a one percent change in price.
The exam angle
Demand is elastic when the magnitude exceeds one. Revenue rises with a price cut only where demand is elastic — the standard exam application.
Where it appears in the syllabus
- EconomicsCFA Level I · exam weight 6–9% · Market structures, business cycles, policy, trade and exchange rates.
Related terms
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Educational content only. This is not financial, investment, legal or regulatory advice. Check the official curriculum for your own exam before relying on any definition here.
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