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# AQA unit 1 economics question help needed watch

1. The marketing department of a company manufacturing and selling washing machines has found that its product has a price elasticity of demand equal to -0.75. This suggests that if the ompany raises the price of washing machines
A the quantity demanded will fall by 75%.
B the amount consumers spend on the product will increase.
C the quantity demanded will increase by 75%.
D the amount consumers spend on the product will fall.

Answer is B, but Why ?
Thanks
2. (Original post by Hi, How are you ?)
The marketing department of a company manufacturing and selling washing machines has found that its product has a price elasticity of demand equal to -0.75. This suggests that if the ompany raises the price of washing machines
A the quantity demanded will fall by 75%.
B the amount consumers spend on the product will increase.
C the quantity demanded will increase by 75%.
D the amount consumers spend on the product will fall.

Answer is B, but Why ?
Thanks
PED is inelastic. So demand will not change much in response to a change in price.

So a 20% increase in price will lead to a 15% fall in quantity demanded or a 40% increase in price will lead to a 30% fall in quantity demanded. It will only lead to a decrease of 75% in q demanded if price increases by 100% and we don't have enough info to make that assumption.

So A and C are wrong.

Amount consumer spends on the product will fall if the percentage increase in price leads to an even larger fall in quantity demanded.
So a 20% increase in price leads to a 25% fall in quantity demanded.

For a lot of goods and services PED is negative it's best to just ignore the negative sign.

3. (Original post by KJKA)
PED is inelastic. So demand will not change much in response to a change in price.

So a 20% increase in price will lead to a 15% fall in quantity demanded or a 40% increase in price will lead to a 30% fall in quantity demanded. It will only lead to a decrease of 75% in q demanded if price increases by 100% and we don't have enough info to make that assumption.

So A and C are wrong.

Amount consumer spends on the product will fall if the percentage increase in price leads to an even larger fall in quantity demanded.
So a 20% increase in price leads to a 25% fall in quantity demanded.

For a lot of goods and services PED is negative it's best to just ignore the negative sign.

So would consumers increase their spending if the % increase in price leads leads to a smaller % decrease in QD and that can only happen if the PED is inelastic ?
4. (Original post by Hi, How are you ?)
So would consumers increase their spending if the % increase in price leads leads to a smaller % decrease in QD and that can only happen if the PED is inelastic ?
I'm a little confuse by your question do you mean

An increase in price say 20% leads to a increase in demand but not as much so 10% increase in q.demanded. So spending would increase and PED is inelastic.

I use to use tutor2u when I was revising economics this might be useful.

http://www.tutor2u.net/economics/rev...of-demand.html
5. PeD= 0.75 is inelastic, this is a steep line in a demand and supply graph, this shows that a big change in price has little effect on demand.
6. Does anyone have the AQA ECON1 June 2012 paper official markscheme , if yes then please may you attach/upload on this thread thanks ...

( I will + Rep )
7. If I'm not mistaken, for May 2012 it's

1. B
2. C
3. D
4. C
5. A
6. D
7. D
8. C
9.A
10. C
11. A
12. B
13. D
14. C
15. B
16. C
17. B
18. D
19. D
20. A
21. A
22. B
23. C
24. A
25.B

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