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

Price elasticity of demand — practice question

The table gives the price of a good together with the total expenditure on that good for certain periods while the market is in equilibrium. Period 1: price $12$, total expenditure $96\,000$. Period 2: price $5$, total expenditure $40\,000$. Period 3: price $8$, total expenditure $64\,000$. Period 4: price $10$, total expenditure $80\,000$. Period 5: price $4$, total expenditure $32\,000$. What conclusion can be drawn from these figures?

  • AThe good has constant opportunity cost.
  • BThe good is an inferior good.
  • CThe price elasticity of demand is equal to one.
  • DThe price elasticity of supply is equal to zero.

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