Quelpr
8 marksMarket Equilibrium

CAPE Economics Unit 1 · 2017 · Paper 2 · Question 1(b)(ii)

A table is provided showing the quantity of lollipops demanded and supplied at prices ranging from 7 to 11.

Use the information in Table 1 to calculate the price elasticity of supply when the price changes from 9 to 10. Interpret your results.

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Other parts of this question

  1. 1(a)(i)Define the term 'price elasticity of supply'.[2 marks]
  2. 1(a)(ii)Define the term 'income elasticity of demand'.[2 marks]
  3. 1(b)(i)Explain, with the aid of a PPF diagram, the concept 'opportunity cost'.[5 marks]
  4. 1(c)Evaluate the CEO's claim that expanding physical capacity to meet high demand will allow the firm to benefit from economies of scale.[8 marks]

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