AS Paper 1, June 2022Introduction to Markets and Market Failure
AS Paper 1, June 2022, Q5(b)
A manufacturer has estimated that the price elasticity of supply of ice cream is +1.5. If the demand for ice cream rises and the price increases by 10%, which one of the following is the resulting percentage change in supply?
Multiple choice1 mark
Context
In March 2020, a substantial increase in the demand for flour resulted in the retail price of flour increasing. Despite the price rises, the supply of flour failed to keep up with the increased demand.
A0.15%
B1.5%
C6.67%
D15%