Price elasticity of demand (PED) measures the responsiveness of quantity demanded to a change in price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price. When a demand curve is a straight line meeting the two axes, the PED at the Y-axis of the line is equal to 1.

Explanation:

1. Definition of Price Elasticity of Demand (PED)
- PED measures the sensitivity or responsiveness of quantity demanded to a change in price.
- It helps determine how much the quantity demanded will change when the price changes.

2. Calculating Price Elasticity of Demand (PED)
- PED is calculated as the percentage change in quantity demanded divided by the percentage change in price.
- PED = (%ΔQ / %ΔP)

3. Straight Line Demand Curve Meeting Two Axes
- When a demand curve is a straight line meeting the two axes, it is called a linear demand curve.
- The slope of the demand curve determines the price elasticity of demand at different points on the curve.

4. Understanding the Slope of a Linear Demand Curve
- The slope of a linear demand curve is constant and represents the rate at which quantity demanded changes with price.
- The slope is negative because as price increases, quantity demanded decreases.

5. Relationship between Slope and Price Elasticity of Demand (PED)
- The magnitude of the slope determines the price elasticity of demand.
- If the slope is steep, the demand is inelastic (PED<1), meaning="" quantity="" demanded="" changes="" less="" than="" proportionately="" to="" a="" change="" in="">
- If the slope is moderate, the demand is unit elastic (PED=1), meaning quantity demanded changes proportionately to a change in price.
- If the slope is flat, the demand is elastic (PED>1), meaning quantity demanded changes more than proportionately to a change in price.

6. Price Elasticity of Demand (PED) at Y-Axis
- At the Y-axis of a linear demand curve, the slope is infinite (vertical line).
- An infinite slope indicates a perfectly elastic demand because any change in price will result in an infinite change in quantity demanded.
- In this case, the price elasticity of demand is equal to 1 (PED=1) because any change in price will be proportionately matched by a change in quantity demanded.

In conclusion, when a straight line demand curve meets the Y-axis, the price elasticity of demand at that point is equal to 1. This indicates a unit elastic demand, where quantity demanded changes proportionately to a change in price.