CAIE A-Level Economics 2.5.4 Elasticity and Surplus Changes

CAIE A-Level Economics 2.5.4 Elasticity and Surplus Changes
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise using PED and PES to compare changes in consumer and producer surplus after taxes, minimum prices or curve changes, with correctly shaded welfare diagrams.

How this is tested

  • draw flatter and steeper curves to compare surplus areas before and after an intervention
  • explain why inelastic demand and elastic supply can produce a larger consumer-surplus loss
  • use the effective minimum price and elasticity value to judge the change in producer surplus

Question 2(b)

[Maximum number: 12]

When the price of a product changes, it usually changes the consumer surplus in the market.

Assess how variations in price elasticity of demand for a product determine the extent of changes in consumer surplus in a market.

OR