Price Elasticity of Demand (PED)
Qd quantity demanded, P price. State sign: usually negative for normal goods.
PED = (% ΔQd) / (% ΔP) Pearson Edexcel International GCSE 4EC1
📊 Edexcel IGCSE Economics Formula Sheet 2025
Micro and macro relationships for Edexcel IGCSE Paper 1 and Paper 2 with concise reminders for learners transitioning into Applied Economics.
Elasticities National Income Costs & Revenue
Stay Exam Ready with Every Edexcel Economics Calculation
Edexcel questions expect you to support analysis with the right calculations. This sheet keeps elasticity, break-even, indices, multiplier, and balance of payments relationships close at hand so you can focus on real-world evaluation.
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Elasticity formulas with sign cues
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Short-run and long-run cost structures
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National income & external sector metrics
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Sentence prompts for Paper 2 data responses
Demand, Supply & Elasticities
Price Elasticity of Supply (PES)
Qs quantity supplied, P price. Positive values indicate responsiveness.
PES = (% ΔQs) / (% ΔP) Income Elasticity of Demand (YED)
Use to classify normal vs inferior goods.
YED = (% ΔQd) / (% ΔIncome) Cross Elasticity of Demand (XED)
Positive ⇒ substitutes, Negative ⇒ complements.
XED = (% ΔQd of X) / (% ΔP of Y) Midpoint Percentage Change
Use for % changes from table data to avoid directional bias.
% Δ = ((New − Old) / ((New + Old)/2)) × 100% Firm Costs, Revenue & Profit
Revenue Relationships
TR total revenue, AR revenue per unit, MR additional revenue per extra unit.
TR
TR = Price × Quantity AR
AR = TR / Quantity MR
MR = ΔTR / ΔQuantity Cost Structures
TFC fixed costs, TVC variable costs, TC total cost, MC change in cost per extra unit.
TC
TC = TFC + TVC ATC
ATC = TC / Quantity AFC
AFC = TFC / Quantity AVC
AVC = TVC / Quantity MC
MC = ΔTC / ΔQuantity Profit & Break-even
Contribution reveals how much each unit supports fixed costs.
Profit
Profit = TR − TC Average Profit
Average Profit = AR − ATC Contribution per unit
Contribution = Price − AVC Break-even output
Break-even = TFC / Contribution per unit Macro Indicators & National Income
Aggregate Demand Identity
C consumption, I investment, G government spending, X exports, M imports.
AD = C + I + G + (X − M) Multiplier
MPC marginal propensity to consume, MPS marginal propensity to save.
Simple multiplier
k = 1 / (1 − MPC) = 1 / MPS National income change
ΔY = k × Initial Injection Price Indices & Inflation
Use CPI/RPI basket values as specified in Edexcel data.
Price index
Index = (Current basket cost / Base year basket cost) × 100 Inflation rate
Inflation (%) = ((Current index − Previous index) / Previous index) × 100 Unemployment
Labour force = employed + actively seeking work.
Unemployment (%) = (Number unemployed / Labour force) × 100 Balance of Payments
Include primary and secondary income flows in calculations.
Current account = (X − M) + Net primary income + Net secondary income Development, Growth & Indices
GDP Growth Rate
Use real GDP values to adjust for inflation.
GDP growth (%) = ((Real GDP this year − Real GDP last year) / Real GDP last year) × 100 GDP per Capita
Helps compare living standards between countries.
GDP per capita = Total GDP / Population Terms of Trade
Export and import price indices (base year = 100).
ToT = (Average export price index / Average import price index) × 100 Human Development Index (HDI)
Composite of health, education, and income indices.
Know the three components; no calculation required in Edexcel specification.
How to Use This Formula Sheet
Boost your Cambridge exam confidence with these proven study strategies from our tutoring experts.
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Quote & Sub in Data
Write the formula before inserting figures from the extract so examiners can award method marks.
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Connect to Diagrams
Follow elasticity or profit calculations with a quick note on the corresponding diagram shift.
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Practice Edexcel Tables
Recreate learner profile and balance sheet tables from specimen papers to improve speed.
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Link to Real-world Cases
After each calculation, comment on how it affects households, firms, or government objectives.
Need Help Using These Edexcel Formulas?
Work through Edexcel-style data response and structured questions with experienced IGCSE Economics tutors. We help you combine accurate calculations with evaluation.
Aligned with Pearson Edexcel International GCSE Economics (4EC1) assessment objectives for 2025 exams.
Always label currency, units, and direction when interpreting numerical outcomes in 12-mark evaluations.