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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 Questions2 marks

Businesses need to understand how demand responds to price changes.

Description

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.

    [2]

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

Paper 2Structured Questions1 marks

Description

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).

  1. a

    State the formula for calculating price elasticity of demand.

    Aim for approximately 1 distinct marking point.

    [1]