Work out the price elasticity of demand of Coca Cola when the demand rises from 1 million to 2 million following a price decrease of £1.50 to £1.35. Is this price elastic or price inelastic?

Price elasticity of demand = % change in quantity demanded / % change in price
PED = ((2m - 1m)/1m x100) / ((1.35-1.5)/1.5 x100)
PED = 100/-10PED= -10
it is price elastic since PED < -1

Answered by Nandini M. Economics tutor

3260 Views

See similar Economics IB tutors

Related Economics IB answers

All answers ▸

How to I approach the 10 mark question on paper 1?


Explain the impact an increase in cost of productions might have on the market price and output of a good


Is a firm earning abnormal profits in perfect competition productively and allocatively efficient?


Qd=420-30P. From this equation identify the slope of the demand function and calculate the price at 60 units.


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences