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1.3 Price determination in a competitive market

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Question 84

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

A

Supply is perfectly elastic and the government imposes a specific unit tax on the producers of the good.

B

Demand is perfectly inelastic and consumer income rises (assuming the good is a normal good).

C

Supply is perfectly inelastic and consumer preferences shift in favour of the good.

D

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

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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