One segment of the commercial aviation and logistics sector seeing significant investment is autonomous offshore drone delivery services. With offshore wind installations expanding rapidly across the North Sea, energy firms require rapid, cost-effective delivery of high-value components and diagnostic tools to remote turbines. Traditional marine support vessels face high fuel costs and weather delays, making specialized heavy-lift drone flight paths highly prized.
While small logistics firms have found the regulatory and hardware acquisition costs prohibitive, larger autonomous operators have invested heavily in expanding their fleets. Between 2018 and 2023, the monthly lease price for a standard drone delivery slot rose from £400 to £500. Over this same period, the number of slots made available by operators grew from 1,200 to 1,680 per month. Operators accommodated this expansion by establishing new automated coastal charging hubs and obtaining multi-vehicle operational permits from the Civil Aviation Authority (CAA).
Using the information in Extract G, and all other things being equal, calculate the price elasticity of supply of monthly drone delivery slots between 2018 and 2023 to one decimal place, and explain the factors that might determine the price elasticity of supply of slots in this 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.