A wholesaler sells boxes of standard-grade copier paper to business customers. Table 1 shows its monthly quantity demanded before and after a price change. All other factors affecting demand remained unchanged.
| Price per box | Quantity demanded per month | |
|---|---|---|
| Before the price change | £25.00 | 400 boxes |
| After the price change | £24.00 | 540 boxes |
Calculate the price elasticity of demand for the boxes of copier paper. Give your answer to one decimal place.
Using your answer to part (a), explain the effect of the price reduction on the wholesaler's total revenue.
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.