Edexcel IGCSEEconomicsGeneral Applications6 Marks
The price of petrol in Country X increased by 10% last month, leading to a 2% fall in the quantity demanded of petrol.
- (a)Define price elasticity of demand (PED).[2]
- (b)Calculate the price elasticity of demand for petrol in Country X.[2]
- (c)State whether the demand for petrol in Country X is price elastic or price inelastic. Justify your answer.[2]
Mark scheme
Marking points from the official mark scheme. The mark or mark type is shown in brackets.
- (a) B1 for change in quantity demanded
- (a) B1 for change in price (or responsiveness of quantity demanded to a change in price)
- (b) M1 for formula (or implied calculation): %ΔQD / %ΔP = -2% / 10%
- (b) A1 for -0.2 (or 0.2)
- (c) B1 for Inelastic
- (c) B1 for Justification (e.g., because the absolute value of PED is less than 1 / because % change in quantity demanded is less than % change in price)
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