CAIE A-Level Economics 2.2.8 Elasticity and Decision-making

CAIE A-Level Economics 2.2.8 Elasticity and Decision-making
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise using PED, YED and XED to predict revenue, tax effectiveness and product demand and evaluating which coefficient is most useful under changing prices, income or…

How this is tested

  • use PED to predict the direction of total revenue after a price change or indirect tax
  • use YED to forecast demand through the economic cycle and XED to assess competitive links
  • evaluate usefulness through data reliability, changing conditions, market definition and stakeholder impacts

Question 2(b)

[Maximum number: 12]

Assess whether knowledge of a product's income elasticity of demand is more important to a firm producing it than knowledge of its cross elasticity of demand.

OR