Economics 2281 · O Level · Price elasticity of demand (PED)
Price elasticity of demand (PED) — practice question
In Saudi Arabia, cement output has increased because construction demand has grown for houses, schools, hospitals and roads. The cement market is also being influenced by price movements, export bans and mergers among cement producers.
(a)[2]
Define the term ‘demand’.
(b)[4]
Explain two reasons why a country may wish to limit exports.
(c)[6]
Analyse how information on the price elasticity of demand for its product may affect a firm’s pricing choices.
(d)[8]
Discuss whether a merger between two firms in the same industry is likely to reduce the product’s price.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “willingness, desire or want” …