The Student Room Group
Competition - post a photo you've taken of nature >>
Competition - post a photo you've taken of nature >>
Competition - post a photo you've taken of nature >>

AQA buss2

I'm re-sitting the buss2 paper tomorrow and don't understand price elasticity in the slightest. Could anyone offer any tips? :smile:

Scroll to see replies

Have you watched Jim Riley's amazing BUSS2 briefing?
Reply 2
Avatar for imran_
imran_
2
Original post by dottylee1886
Have you watched Jim Riley's amazing BUSS2 briefing?


its not amazing, its a copy of the buss4 workshop. How does he expect us to write so much for a single paragraph?
Ok then.. Where would you be without Tutor2u?
Original post by imran_
its not amazing, its a copy of the buss4 workshop. How does he expect us to write so much for a single paragraph?
Reply 4
Avatar for imran_
imran_
2
Original post by dottylee1886
Ok then.. Where would you be without Tutor2u?


Lol if you're only depending on his 'exam techniques' then good luck, he gets paid for the presentation, do you really think he gives a f*uck about how u do in the exam
what questions do you think will come up?
Reply 6
Avatar for imran_
imran_
2
Original post by georgie2498
what questions do you think will come up?


Nobody knows. They would just be predictions and most likely wrong.
Reply 7
Avatar for imran_
imran_
2
Original post by jamiemariec
I'm re-sitting the buss2 paper tomorrow and don't understand price elasticity in the slightest. Could anyone offer any tips? :smile:


PED is used to measure the impact a change in price has on demand. You wont be asked to work this out.

Inelastic demand, this is usually LESS than 1. This is where a change in price has little impact on demand. E.g. -0.7 is Enelastic.

Elastic demand, is where a change in price leaders to a GREATER change in demand. This is always GREATER than 1. E.g. -1.4

Always ignore the '- sign.
Reply 8
Avatar for jamiemariec
jamiemariec
OP
1
Original post by dottylee1886
Have you watched Jim Riley's amazing BUSS2 briefing?


I have not but will now, thank you!
Reply 9
Avatar for jamiemariec
jamiemariec
OP
1
Original post by imran_
PED is used to measure the impact a change in price has on demand. You wont be asked to work this out.

Inelastic demand, this is usually LESS than 1. This is where a change in price has little impact on demand. E.g. -0.7 is Enelastic.

Elastic demand, is where a change in price leaders to a GREATER change in demand. This is always GREATER than 1. E.g. -1.4

Always ignore the '- sign.


Thank you, much appreciated. PED is making a lot more sense now.
Reply 10
Avatar for imran_
imran_
2
Original post by jamiemariec
Thank you, much appreciated. PED is making a lot more sense now.


You're welcome, remember businesses will need to react to changes in PED.

For example if a product is inelastic. Firms can INCREASE selling price in order to generate a greater revenue as consumers will still want to purchase the product. However this is dependant on how strongly inelastic it is. For example if its -0.1 which is fairly weak, then changing price may not be the best idea.

For elastic products, firms may chose to REDUCE the price to generate greater revenue as consumers would prefer a cheaper product.
Original post by imran_
PED is used to measure the impact a change in price has on demand. You wont be asked to work this out.

Inelastic demand, this is usually LESS than 1. This is where a change in price has little impact on demand. E.g. -0.7 is Enelastic.

Elastic demand, is where a change in price leaders to a GREATER change in demand. This is always GREATER than 1. E.g. -1.4

Always ignore the '- sign.


You can be asked to calculate the PED, someone doesn't know their BUSS2 knowledge.

PED = % Change in the Quantity Demand / % Change in Price
Reply 12
Avatar for imran_
imran_
2
Original post by dottylee1886
You can be asked to calculate the PED, someone doesn't know their BUSS2 knowledge.

PED = % Change in the Quantity Demand / % Change in Price


Lol, read the specification and come back to apologise for being wrong.
Fair play my mistake, it is still useful to know and can be used to build up the analysis to achieve GAN.
Original post by imran_
Lol, read the specification and come back to apologise for being wrong.
Reply 14
Avatar for imran_
imran_
2
Original post by dottylee1886
Fair play my mistake, it is still useful to know and can be used to build up the analysis to achieve GAN.


Simple maths. E.g. PED Of -0.4

means a 100% increase in price would only have a 40% change in demand. Correct me if i'm wrong
Yes that's correct I take economics. They may give you PED (-0.4 Inelastic) and say that they wish to increase prices by 100% you could mentioned how this would only change demand by 40% which will lead to an increase in revenue etc. as you mentioned.
Original post by imran_
Simple maths. E.g. PED Of -0.4

means a 100% increase in price would only have a 40% change in demand. Correct me if i'm wrong
How did everyone find the exam today??
What did you get for 1a?
32188 units
Oh, great, so did I, was a bit worried for some reason.

Quick Reply

Related discussions

Latest

Trending

Trending

Articles for you