Cambridge IGCSE Economics practice

Paper 2 structured question: Price elasticity of supply (PES)

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Price elasticity of supply (PES)

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Paper 2Structured Questions4 marks

The market for smartphones has seen significant changes in price and supply.

Description

In the last year, the price of smartphones increased by 25%, leading to a 50% increase in the quantity supplied.

a
Calculate the price elasticity of supply (PES) for smartphones.
Your answer
Aim for approximately 2 distinct marking points.
[2]
b
Explain what the PES result indicates about the supply of smartphones.
Your answer
Aim for approximately 2 distinct marking points.
[2]

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Paper 2Structured Questions4 marks

Description

With the introduction of new technology, the price of electric cars decreased by 20%, and the quantity supplied increased by 40%.

a
Calculate the price elasticity of supply (PES) for electric cars.
Your answer
Aim for approximately 2 distinct marking points.
[2]
b
Discuss the implications of this PES result for electric car manufacturers.
Your answer
Aim for approximately 2 distinct marking points.
[2]