Edexcel IGCSE Economics 1.1.4.g total revenue and PED

Practise total-revenue elasticity questions by comparing revenue before and after a price change in a real product context.

Exam points

Use total revenue before and after a price change to judge whether demand is elastic or inelastic.
Apply elasticity reasoning to a real product where high resale prices reflect limited supply.

[Maximum number: 2]

Figure 6 shows financial data for a firm selling a selection of products.

Figure 6

Calculate the total revenue for the product that has a price elasticity of demand (PED) which is inelastic. You are advised to show your working.

A02 2 marks

Award 1 mark for selecting product X (1)

Award 1 mark for correct total revenue $\$ 3000 \times 50=\$ 150000$ (1)

Award 2 marks if total revenue is accurately calculated as $ 150000, even if no calculations are shown

Award 1 mark if the answer given is 150000, even if no calculations are shown

Do not award marks for a formula

(2)

Question
number

With reference to the data above and your knowledge of economics, analyse the reasons why consumers may not maximise their benefit when consuming sugary drinks.

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1.1.4.g PED and total revenue question 1