IGCSE Economics Price Elasticity of Demand and Supply HW9 Activity – 1 (5 minutes) a.) The price of packet of Salt has increased and as a result the quantity of demand has fallen as follows. Price per packet Quantity of demand 6 200 9 160 Calculate its PED and explain the changes in sales revenue. b.) The price of Banana per KG has increased from $20 to $22 and its quantity demanded has fallen from 400 units to 300 units. Calculate its PED and explain the changes in sales revenue. Activity 2 – (7 minutes) Price elasticity of a certain product is 2. Would you advise the seller of this product to increase the selling price in order to increase his sales income? Justify your answer. Activity 3 – (4 minutes) In each case, calculate the PES: a. A fall in price from $5 to $4 causes supply to contract from 10,000 to 4,000. b. Supply extends from 200 to 210 when price rises from $10 to $14. Activity 4 – (4 minutes) Decide in each case, whether supply is likely to be elastic or inelastic: a. elastic bands b. tee-shirts c. aircraft d. pencils e. lamb.