WorksheetsPrice Elasticity of Demand Worksheet
Total questions: 15
Worksheet time: 10mins
Price rises from 20to 25; quantity falls from 100 to 80. What is |PED|?
0.80
1.00
1.20
0.50
Price rises from 8to 10; quantity falls from 500 to 400. What is |PED|?
0.85
1.00
1.15
0.40
Price falls from 40to 36; quantity rises from 200 to 220. What is |PED|?
0.57
0.90
1.10
1.50
Price rises from RM 2.00 to RM 2.40; quantity falls from 1,000 to 950. What is |PED|?
0.15
0.28
0.75
1.10
Price rises from 0.40 KD to 0.44 KD; quantity falls from 2,000 to 1,800. What is |PED|?
0.85
1.11
0.98
1.50
Price falls from £600 to £540; quantity rises from 10,000 to 11,500. What is |PED|?
0.67
1.10
1.33
1.80
Price falls from 30to 27; quantity rises from 120 to 150. What is |PED|?
0.95
1.50
2.11
3.00
Price rises from £50 to £55 (bulk pack); quantity falls from 1,000 to 920. What is |PED|?
0.60
0.88
1.10
1.50
Price falls from 10to 8; quantity rises from 400 to 520. What is |PED|?
0.85
1.00
1.17
1.50
If a firm raises price by 5% and |PED| = 1.40, total revenue will:
Increase
Decrease
Stay the same
Cannot be determined
Which good is most likely to have inelastic demand in the short run?
A) A specific bottled water brand
B) Insulin
C) Luxury handbags
D) Streaming services
Which change would make demand more price elastic (all else equal)?
A near-identical competitor enters the market for a branded snack. The PED for the original brand will likely:
Increase (more elastic)
Decrease (more inelastic)
Become unit elastic
Not change
Elasticity Along a Linear Demand Curve Moving down a straight-line demand curve (from high P/low Q to low P/high Q), |PED| tends to:
Increase
Decrease
Stay the same
Flip sign
A key advantage of the midpoint (arc) method over the simple/base method is that it:
Eliminates the need for quantities
Is independent of the direction of change (order-neutral)
Always equals point elasticity
Uses only the initial price and quantity
