Commentary coversheet

Economics commentary number :                    HL number 1

Title of extract :                         VW leads field but expects brake on earning 

Source of extract :                        financial times 

Date of extract :                         07.04.2009

Word count :                                   666 words 

Date  the commentary was written :

Candidate name : Mariusz Nguyen Long Thanh

Candidate number :  

Commentary 1

Price elasticity of demand (PED ) is the measure of the responsiveness of the demand for a certain good to a change in the price of this good. It is a measure of how consumers react to a change in price.

The formula used to calculate the price elasticity of demand for a given product is :

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                               % change in quantity demanded of good A

             PED =    

                 % change in prices of good A  

Figure 1 : demand

VW on Monday revealed net income of €4.7bn ($6bn) last year, 14 per cent higher than in 2007, while sales increased 4.5 per cent to €114bn as VW ...

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