Price Elasticity of Demand (PED)
Measures responsiveness of quantity demanded to price changes.
Usually negative; report absolute value if asked for magnitude only.
PED = (% ฮ in quantity demanded) / (% ฮ in price) AQA GCSE 2025
๐ AQA GCSE Economics Formula Sheet
Essential formulas for elasticities, costs, revenue, national income, and macroeconomic indicators aligned to AQA GCSE Economics (8136) specification.
Elasticities Costs & Revenue National Income
Master GCSE Economics
This formula sheet covers fundamental economics relationships from the AQA GCSE Economics specification, helping you calculate elasticities, analyze costs and revenue, and understand macroeconomic indicators.
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Elasticity calculations
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Cost & revenue structures
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Macroeconomic indicators
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Application tips
Elasticities
Measures of responsiveness in demand and supply to changes in price, income, and related goods.
Price Elasticity of Supply (PES)
Measures responsiveness of quantity supplied to price changes.
PES = (% ฮ in quantity supplied) / (% ฮ in price) Income Elasticity of Demand (YED)
Positive for normal goods, negative for inferior goods.
YED = (% ฮ in quantity demanded) / (% ฮ in income) Cross Elasticity of Demand (XED)
Positive for substitutes, negative for complements.
XED = (% ฮ in quantity demanded of good X) / (% ฮ in price of good Y) Topic Focus
Elasticity Interpretation
- PED > 1: elastic (demand is responsive); PED < 1: inelastic (demand is unresponsive).
- YED > 0: normal good; YED < 0: inferior good; YED > 1: luxury good.
- XED > 0: substitutes; XED < 0: complements.
Costs, Revenue & Profit
Understanding firm costs, revenue structures, and profit calculations.
Total Revenue
TR total revenue, P price, Q quantity.
TR = P ร Q Total Cost
TC total cost, TFC total fixed cost, TVC total variable cost.
TC = TFC + TVC Average Cost
AC average cost, TC total cost, Q quantity.
AC = TC / Q Profit
Total profit from business operations.
Profit = TR โ TC Topic Focus
Cost Structures
- Fixed costs don't change with output; variable costs increase with output.
- Average cost shows cost per unit of output.
- Profit maximization occurs where marginal revenue equals marginal cost (MR = MC).
National Income & Macro Indicators
Key macroeconomic calculations and indicators.
Aggregate Demand
C consumption, I investment, G government spending, X exports, M imports.
AD = C + I + G + (X โ M) GDP Growth Rate
Percentage change in GDP over time.
GDP Growth = ((GDP this year โ GDP last year) / GDP last year) ร 100% Inflation Rate
Percentage change in price level.
Inflation = ((Price Index this year โ Price Index last year) / Price Index last year) ร 100% Topic Focus
Macroeconomic Analysis
- Aggregate demand shows total spending in the economy.
- GDP growth rate indicates economic expansion (positive) or contraction (negative).
- Inflation rate measures how fast prices are rising in the economy.
How to Use This Formula Sheet
Boost your Cambridge exam confidence with these proven study strategies from our tutoring experts.
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Show Percentage Changes
Always show your working when calculating percentage changes. Use the midpoint method for large changes.
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Interpret Results
Don't just calculateโexplain what the elasticity or ratio means and its implications for businesses or the economy.
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Formulas align with AQA GCSE Economics specification (8136) for UK students.
Always show your working, include units, and interpret results in economic context.