Price Elasticity is one of 10 topics in the Grade 11 Economics CAPS syllabus, covered across 3 lessons on Study Vault. Below are real practice questions from this topic with full worked answers.
Sample practice questions
Easy
1. Price elasticity of demand (PED) is calculated as:
Percentage change in quantity demanded divided by percentage change in price
Percentage change in price divided by percentage change in quantity demanded
Total revenue divided by total cost
Quantity demanded multiplied by price
Answer: Percentage change in quantity demanded divided by percentage change in price — PED = %change in quantity demanded / %change in price, measuring how responsive quantity demanded is to a price change.
Easy
2. Demand is described as elastic when the PED coefficient (in absolute value) is:
Greater than 1
Less than 1
Exactly equal to 1
Exactly equal to 0
Answer: Greater than 1 — Demand is elastic when the PED coefficient is greater than 1, meaning quantity demanded changes proportionally more than price, indicating consumers are highly responsive to the price change.
Medium
3. The price of a good rises by 10%, causing quantity demanded to fall by 25%. Calculate the price elasticity of demand coefficient (as an absolute value, to one decimal place).
Answer: 2.5 — PED = %change in Qd / %change in P = -25% / 10% = -2,5; taking the absolute value gives a PED of 2,5, indicating elastic demand.
