What do you understand by price elasticity and explain how is it related to revenue? Discuss in detail about the determinants of price elasticity.

Price elasticity of demand (PED) refers to the measure of how the quantity demanded of a good or service changes in response to a change in its price. In managerial economics, it is a crucial concept that helps businesses understand the sensitivity of consumers to price fluctuations, allowing firms to make informed pricing decisions that maximize their revenue.

Price elasticity is quantified by the price elasticity of demand coefficient, which is calculated as:

\[
PED = \frac{\% \text{ change in quantity demanded}}{\% \text{ change in price}}
\]

The value of PED determines how demand responds to price changes:

1. Elastic Demand (PED > 1): If the absolute value of PED is greater than 1, demand is considered elastic. In this case, consumers are highly responsive to price changes, meaning that a small increase in price leads to a significant decrease in quantity demanded, and a price decrease leads to a large increase in quantity demanded.
   
2. Inelastic Demand (PED < 1): If the absolute value of PED is less than 1, demand is inelastic. This means that consumers are less responsive to price changes. A price increase results in a relatively smaller reduction in quantity demanded, while a price decrease results in a smaller increase in quantity demanded.

3. Unitary Elastic Demand (PED = 1): When the absolute value of PED equals 1, demand is said to be unitary elastic. A price change leads to a proportional change in quantity demanded, where the percentage change in ____ ______ _________ ________ _______ _______ _______ ___ _________.
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