O-LevelEconomicsMicroeconomic decision makers2281/13 · Oct/Nov 2023 · Q101 Mark

When the price of a good is $10, the quantity demanded is 100 units per day. Which combination of price change and price elasticity of demand will cause the largest increase in the quantity demanded for the good?

Aprice change: price falls to $9, price elasticity of demand: 0.8

Bprice change: price falls to $9, price elasticity of demand: 1.2

Cprice change: price rises to $11, price elasticity of demand: 0.8

Dprice change: price rises to $11, price elasticity of demand: 1.2

✓ Correct answer

B: price change: price falls to $9, price elasticity of demand: 1.2

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Topic: Microeconomic decision makers, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, Oct/Nov 2023 Paper 1 Variant 3, question 10.

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