Economics 9708 · AS & A Level · Price elasticity of demand

Price elasticity of demand — practice question

(a)[8]

Explain why the value of income elasticity of demand for a good may be positive, negative or zero, whereas the value of its price elasticity of demand is most likely to be negative.

(b)[12]

Discuss whether price elasticity of demand is a more useful concept than income elasticity of demand for a business that is trying to increase its sales revenue.

Worked solution & mark scheme

This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Knowledge and understanding of price elasticity and income elasticity of demand: what each measures.” …

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