Paper 3 asks for an elasticity calculation every year, for 2 or 3 marks. Every one uses one of three moves.
Three moves
Read two points off a diagram
The price and quantity before and after, from the axes.
Work out a missing number first
No price in the table? Price = revenue ÷ quantity.
Work backwards
Given PED and the % change in price, find the % change in quantity.
The points to remember
- Divide every change by the original value.
- Quantity on top, price underneath.
- Round to two decimal places; give units where there are any (%, €).
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May 2023 and May 2024 both asked for PED read from a diagram.
Our example (made-up numbers)
| Point A | Point B | % change | |
|---|---|---|---|
| Price | €20 | €25 | +25% |
| Quantity demanded | 60 kg | 48 kg | −20% |
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Remember it as: Two points, two percentages, quantity on top.
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Data questions add one step before the formula, or ask you to work backwards.
From data: three worked examples
A missing price
2024: revenue €40,000 from 8,000 kg, so price = €5.00. 2025: €4.50 and 9,000 kg. PED = +12.5% ÷ −10% = −1.25.
Backwards from PED
PED = −0.4 and the price rises 5%: %ΔQd = −0.4 × 5 = −2%, a 2% fall.
YED from data
Income €25,000 → €27,500 (+10%); quantity 100 → 108 (+8%). YED = 8 ÷ 10 = 0.8.
How a 2-mark elasticity calculation is marked
| You write | Marks |
|---|---|
| Valid working: a correct % change, the formula the right way up | 1 |
| The answer (the minus sign is optional for PED) | 1 |
| The answer only, no working | 1 |
| The formula upside down | 0 |
Two rules that protect you: If an earlier part is wrong, use your own figure: the own-figure rule still gives you the marks for correct working later. Rounding and unit slips cost a mark only once per paper.
Paper 3 asked this in May 2023 and again in May 2024, for 2 marks.
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Using Figure 1, calculate the price elasticity of demand for olive oil when the price rises from €4 to €6 per litre.
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How a 2-mark elasticity calculation is marked
| You write | Marks |
|---|---|
| Valid working: a correct % change, the formula the right way up | 1 |
| The answer (the minus sign is optional for PED) | 1 |
| The answer only, no working | 1 |
| The formula upside down | 0 |