Two businesses are each considering a 10% cut in the price of the product they sell. Their estimated price elasticity of demand coefficients are shown below.
| Business | Product | PED coefficient |
|---|---|---|
| Indoor-climbing centre | Indoor-climbing sessions | 1.4 |
| Town supermarket | Table salt | 0.6 |
Which outcome is most likely?
The indoor-climbing centre's quantity demanded increases by 14% and its revenue falls, while the town supermarket's quantity demanded increases by 6% and its revenue rises
The indoor-climbing centre's quantity demanded increases by 10% and its revenue is unchanged, while the town supermarket's quantity demanded increases by 10% and its revenue is unchanged
The indoor-climbing centre's quantity demanded increases by 6% and its revenue falls, while the town supermarket's quantity demanded increases by 14% and its revenue rises
The indoor-climbing centre's quantity demanded increases by 14% and its revenue rises, while the town supermarket's quantity demanded increases by 6% and its revenue falls
82 exam-style questions on OCR GCSE Economics 2.2 Demand, covering 2.2.1 What is demand, 2.2.2 Draw a demand curve using data, 2.2.3 Explain a demand curve, 2.2.4 Shifts and movements of the demand curve, 2.2.5 Causes and consequences of demand changes, 2.2.6 Price elasticity of demand, 2.2.7 Draw demand curves of different elasticity, and 2.2.8 Importance of price elasticity of demand. Each one has a worked solution and a mark scheme showing where the marks go.