Question 1

Section B - Case 2: CyberShield

CyberShield is a tech startup developing a new B2B SaaS (Software as a Service) platform for cybersecurity.

Market research shows that at a monthly subscription price of $100, demand is 5,000 users. If the price is increased to $110, demand falls to 4,000 users.

Calculate the Price Elasticity of Demand (PED) using the simple formula: (% change in quantity demanded) / (% change in price). (Enter the absolute value to one decimal place)

Accepted Answer

1. Calculate % change in quantity: (New Q - Old Q) / Old Q. 2. Calculate % change in price: (New P - Old P) / Old P. 3. Divide % change in Q by % change in P. 4. Take the absolute value.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Dividing % change in price by % change in quantity (inverting the formula).

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA PM — Performance Management Practice Exam 3

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