A pottery studio is considering increasing the price of places on its weekend workshops. The studio assumes that its estimate of price elasticity of demand (PED) applies over the proposed price change.
| Current price per place | Current quantity sold per month | Estimated PED | Planned price rise |
|---|---|---|---|
| £40 | 200 | −1.5 | 10% |
Calculate the pottery studio’s new monthly total revenue after the price rise.
Explain whether the pottery studio should make the price change if its only objective is to increase monthly total revenue.
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.