AS Paper 1, June 2023Introduction to Markets and Market Failure
AS Paper 1, June 2023, Q2(b)
The table below shows estimates of the price elasticity of supply and price elasticity of demand for gas. Natural Gas Price elasticity of supply +0.14 Price elasticity of demand −0.10 Which one of the following can be inferred from the table?
Multiple choice1 mark
Context
The world’s largest producer of natural gas is the USA. In 2021 production fell even though the price increased.
AA 10% increase in the price of gas would cause a more than 10% increase in the supply
BGas is a normal good with income inelastic demand
CThe demand and supply of gas are both price inelastic
DThe demand for gas is more responsive to changes in price than supply