Economics 0455 · IGCSE · Price elasticity of demand (PED)

Price elasticity of demand (PED) — practice question

A railway company raises ticket prices by $10\%$ for journeys between 06:00 and 09:00, which leads to a $2\%$ fall in demand. After 09:00 it cuts ticket prices by $5\%$, causing demand to rise by $7\%$. What is the price elasticity of demand in response to these price changes?

  • Aelastic between 06:00 and 09:00; elastic after 09:00
  • Belastic between 06:00 and 09:00; inelastic after 09:00
  • Cinelastic between 06:00 and 09:00; elastic after 09:00
  • Dinelastic between 06:00 and 09:00; inelastic after 09:00

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