O-LevelEconomicsMicroeconomic decision makers2281/12 · Oct/Nov 2019 · Q71 Mark

A railway company increases ticket prices by 10% for travel between 06:00 and 09:00, causing a reduction in demand by 2%. After 09:00 it reduces ticket prices by 5%, resulting in a 7% increase in demand. What is the price elasticity of demand in response to these price changes?

Abetween 06:00 and 09:00: elastic, after 09:00: elastic

Bbetween 06:00 and 09:00: elastic, after 09:00: inelastic

Cbetween 06:00 and 09:00: inelastic, after 09:00: elastic

Dbetween 06:00 and 09:00: inelastic, after 09:00: inelastic

✓ Correct answer

C: between 06:00 and 09:00: inelastic, after 09:00: elastic

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Topic: Microeconomic decision makers, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, Oct/Nov 2019 Paper 1 Variant 2, question 7.

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