The price one household pays for electricity rises from 20p to 21p per kWh. All other influences on the household's demand for electricity remain unchanged.
| Time | Household's weekly electricity use |
|---|---|
| Before the price rise | 100 kWh |
| Immediately after the price rise | 98 kWh |
| Three years after the price rise | 93 kWh |
Which conclusion about the household's demand is correct?
PED is -2 immediately, so demand is price elastic, and -7 after three years, so demand is price elastic.
PED is -0.1 immediately, so demand is price inelastic, and -0.35 after three years, so demand is price inelastic.
PED is -0.4 immediately, so demand is price inelastic, and -1.4 after three years, so demand is price elastic.
PED is -0.41 immediately, so demand is price inelastic, and -1.51 after three years, so demand is price elastic.
236 exam-style questions on AQA GCSE Economics 1.3 How prices are determined, covering 1.3.1a Demand and the factors that influence it, 1.3.1b The demand curve, 1.3.2a Supply and the factors that influence it, 1.3.2b The supply curve, 1.3.3a Determining equilibrium price, 1.3.3b Applying diagrams and showing revenue, 1.3.4a Complements and substitutes, 1.3.4b Effects of changes on related markets, 1.3.5a Price elasticity of demand, 1.3.5b Factors affecting price elasticity of demand, 1.3.5c Measuring PED and its implications, 1.3.6a Price elasticity of supply, 1.3.6b Factors affecting price elasticity of supply, and 1.3.6c Measuring PES and its implications. Each one has a worked solution and a mark scheme showing where the marks go.