Question 6
[Maximum number: 1]
A theatre has a fixed number of tickets to sell for each performance.
What is the price elasticity of supply?
A
perfectly elastic
B
perfectly inelastic
C
unit elastic and negative
D
unit elastic and positive
CAIE A-Level Economics 2.3 Price Elasticity of Supply Question Bank
Practise defining, calculating and interpreting PES and explaining how time, spare capacity, stocks, factor mobility and production constraints affect firms' output response.
Exam points
- calculate PES from percentage changes in quantity supplied and price using consistent base values
- interpret the coefficient or curve as elastic, inelastic, unitary or a perfect case
- explain short-run and long-run differences through capacity, stocks, production time and factor mobility
Covered syllabus points
Question 9
[Maximum number: 1]
What is price elasticity of supply?
A
the change in the quantity supplied when a price changes
B
the change in the quantity supplied when demand changes
C
the comparison of the proportionate change in supply to the proportionate change in demand
D
the comparison of the proportionate change in supply to the proportionate change in price
Question 10
[Maximum number: 1]
Four firms produce furniture. The table shows the price elasticity of supply (PES) for each firm.
If the price of furniture rises by 5% which firm would experience an increase in quantity supplied of 2.5% ?
PES for
furniture
2.5
2.0
0.6
0.5
Question 3(a)
[Maximum number: 8]
Explain what determines elastic and inelastic price elasticity of supply (PES) and consider the extent to which the value of PES may differ between an agricultural good and a manufactured good.
Question 3(b)
[Maximum number: 12]
Assess the extent to which knowledge of a product's price elasticity of supply is the most useful measure of elasticity to a firm needing to react quickly to changes in its market.
Section C
Answer one question.
EITHER