CAIE A-Level Economics 2.2.7 PED & total expenditure

CAIE A-Level Economics 2.2.7 PED & total expenditure
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise linking PED to total expenditure and revenue, using tables, diagrams and price-change scenarios to predict outcomes.

How this is tested

  • calculate how a price change affects quantity demanded and total expenditure using PED
  • interpret revenue rectangles or demand schedules to identify unitary, elastic or inelastic demand
  • predict whether price cuts, price rises or tax removal increase producer revenue

Question 11

[Maximum number: 1]

A decrease in the quantity demanded of a product results in a proportionate decrease in sales revenues.

What is true about its price elasticity of demand?

A

It is between zero and one.

B

It is infinite.

C

It is unitary.

D

It is zero.