Economics Multiple Choice Question – 16 August 2017

Economics

The price of a small chocolate bar increased from 50 pence to 55 pence per bar. The manufacturers found that the demand for their bar decreased by 5%. What is the price elasticity of demand (PED) for the chocolate bar?

Select ONE answer:

  1. -1
  2. -2
  3. -0.5
  4. -5
  5. -10

Justify your answer?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Economics KS5 classes.

The answer is 3 – Price elasticity measures the responsiveness of the quantity demanded or supplied of a good to a change in its price. It is computed as the percentage change in quantity demanded—or supplied—divided by the percentage change in price. i.e. -5% (decrease in quantity demanded) / (55/50 = 10% increase) = -0.5

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s