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1.3 Price determination in a competitive market

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Question 40

Which one of the following situations would lead to a decrease in the equilibrium price of a good?

A

Demand is perfectly elastic and the price of a substitute good falls.

B

Supply is perfectly inelastic and consumer income falls (assuming the good is a normal good).

C

Supply is perfectly elastic and raw material costs rise.

D

Demand is perfectly inelastic and raw material costs rise.

Markscheme

1.3 Price determination in a competitive market Questions

  1. A Level
  2. /Economics
  3. /1.3 Price determination in a competitive market

256 exam-style questions on AQA A Level Economics 1.3 Price determination in a competitive market, covering 1.3.1 The determinants of the demand for goods and services, 1.3.2 Price, income and cross elasticities of demand, 1.3.3 The determinants of the supply of goods and services, 1.3.4 Price elasticity of supply, 1.3.5 The determination of equilibrium market prices, and 1.3.6 The interrelationship between markets. Each one has a worked solution and a mark scheme showing where the marks go.

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