CAIE A-Level Economics 2.2.6 Elasticity Determinants

CAIE A-Level Economics 2.2.6 Elasticity Determinants
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise explaining demand responsiveness through substitutes, necessity, income share, habit, market definition and time, then judging which factors firms can realistically…

How this is tested

  • link more close substitutes and a narrower market definition to more price-elastic demand
  • explain why necessity, habit or a small income share tends to make demand less price elastic
  • evaluate how time permits substitution and whether branding or product differentiation can alter responsiveness

Question 1(a)(i)

[Maximum number: 1]

How do we make sure cocoa bean farmers get paid a living wage?

Chocolate is very big business.

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Perhaps the long-term solution is to reduce the country's dependence on cocoa bean exports and diversify into other products that can offer more and better paid job opportunities.

Identify one possible reason for the value of price elasticity of demand (PED) for chocolate.