PED of Primary Commodities vs Manufactured Goods
Elasticities of Demand
AO2·HL
Syllabus requirement
Primary commodities tend to have lower PED than manufactured goods due to lack of substitutes and necessity. HL only.
Assessment objectives
AO2 Application and Analysis
Higher LevelThis topic is assessed at HL.
Summary
This topic explains why price elasticity of demand (PED) often differs between primary commodities and manufactured goods. It links the observed elasticity to determinants such as availability of close substitutes, degree of necessity, proportion of income or production costs, and the time consumers or firms have to adjust. Understanding these differences helps predict how quantity demanded will respond to price changes for different types of products.
