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Cambridge IGCSE Economics practice

Paper 2 structured question: Price elasticity of demand (PED)

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Price elasticity of demand (PED)

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Paper 2Structured Questions1 marks

Understanding how price changes affect consumer behavior is crucial for businesses.

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Price Elasticity of Demand

Price elasticity of demand (PED) measures how much the quantity demanded of a good changes when its price changes. It is calculated using the formula: PED = (% Change in Quantity Demanded) / (% Change in Price).

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    State the formula for calculating price elasticity of demand.

    Aim for approximately 1 distinct marking point.

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Paper 2 structured question: Price elasticity of demand (PED)

Paper 2Structured Questions2 marks

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Factors Affecting PED

Several factors influence the price elasticity of demand, including the availability of substitutes, whether the good is a necessity or a luxury, and the proportion of income spent on the good.

  1. a

    Explain two factors that affect the price elasticity of demand.

    Aim for approximately 2 distinct marking points.

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