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1.3 Price determination in a competitive market

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Question 27

A municipal bus service faces a constant price elasticity of demand of -0.4 for its transit passes. If the transport authority increases the price of a transit pass by 20%, what is the resulting percentage change in total consumer expenditure on these passes?

A

A decrease of 8.0%8.0\%8.0%

B

An increase of 10.4%10.4\%10.4%

C

An increase of 12.0%12.0\%12.0%

D

An increase of 20.0%20.0\%20.0%

Markscheme

1.3 Price determination in a competitive market Questions

  1. A Level
  2. /Economics
  3. /1.3 Price determination in a competitive market

256 exam-style questions on AQA A Level Economics 1.3 Price determination in a competitive market, covering 1.3.1 The determinants of the demand for goods and services, 1.3.2 Price, income and cross elasticities of demand, 1.3.3 The determinants of the supply of goods and services, 1.3.4 Price elasticity of supply, 1.3.5 The determination of equilibrium market prices, and 1.3.6 The interrelationship between markets. Each one has a worked solution and a mark scheme showing where the marks go.

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