Economics 2281 · O Level · Price elasticity of demand (PED)
Price elasticity of demand (PED) — practice question
A heatwave in July 2013 in the United Kingdom caused sales of ice cream to more than double. Extra workers were hired to cope with the stronger demand. Over recent years, the demand and supply conditions for ice cream have altered, so that demand and supply have become more elastic. The market has also been affected by government policies and by changes in the nation’s economic growth rate.
(a)[2]
Define ‘supply’.
(b)[4]
Explain two ways a government could affect the price of a product.
(c)[6]
Analyse why demand for a product may become more price elastic.
(d)[8]
Discuss whether the wages of all workers will increase during a period of economic growth.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme.