CAIE IGCSE Economics 2.6.4 PED, consumer expenditure & firms’ revenue
Practise linking PED to consumer spending and firm revenue when prices rise or fall, using values and short scenarios.
- Syllabus
- 2027–2029
- Course
- Economics 0455
Exam points
- predict whether total revenue rises, falls or stays unchanged after a price change and PED value
- explain why price cuts raise revenue when demand is elastic but may reduce it when demand is inelastic
- use revenue changes from a firm scenario to infer capacity, demand response or PED significance
2.6.4—PED, consumer expenditure and firms’ revenue question 1
[Maximum number: 1]
The price elasticity of demand (PED) of a good is -1.
What will happen to both demand and total revenue as price increases?
A
demand will fall and total revenue will not change
B
demand will fall and total revenue will rise
C
demand will rise and total revenue will not change
D
demand will rise and total revenue will rise
A
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