Day: December 17, 2017

Economics Multiple Choice Question – 17 December 2017

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

An increase in the price of 10% has led to a fall in sales of 20%.

The price elasticity of demand is?

Select ONE answer:

  1. -2
  2. +2
  3. -0.2
  4. -0.5
  5. +0.5

Is this price elastic or price in-elastic and why:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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

The answer is 1 – The formula for calculating the price elasticity of demand is: Price Elasticity of Demand = % Change in Quantity Demanded / % Change in Price. If a small change in price is accompanied by a large change in quantity demanded, the product is said to be elastic (or responsive to price changes). Here PED = % change in QD of -20% / % change in P of 10% or -2.

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