Economics · May / June 2024 · Paper 11 · Question 7

2281Price elasticity of demand (PED)

A firm changes the price of its product and finds that its revenue increases. Which combination of price change and price elasticity of demand would have caused this?

Aprice falls; price elasticity of demand between 0 and 1
Bprice falls; price elasticity of demand equal to 1
Cprice rises; price elasticity of demand between 0 and 1
Dprice rises; price elasticity of demand greater than 1

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Correct answer: C. price rises; price elasticity of demand between 0 and 1

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