Economics (AS & A Level) · May / June 2024 · Paper 13 · Question 8
9708Price elasticity, income elasticity and cross elasticity of demand
A firm is charging a price of $12 for its product and using 80% of its production capacity of 10 000 units per month. Assuming the product has unitary price elastic demand, which price should the firm charge to utilise its full capacity?
- A$9.00
- B$9.60
- C$10.00
- D$10.60
As printed in the paper
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Correct answer: A. $9.00
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