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1.3 Price determination in a competitive market

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Question 12

The table below shows the cross elasticities of demand (XED) for the products of four different firms with respect to the prices of their closest substitute goods.

Product ofCross elasticity of demand
Firm W+2.5
Firm X+1.4
Firm Y+0.8
Firm Z+0.2

All other things being equal, which one of the firms is most likely to possess the greatest market power?

A

Firm W

B

Firm X

C

Firm Y

D

Firm Z

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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