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1.3 Price determination in a competitive market

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Question 19

The diagram below shows the market supply curve for commercial drone delivery services shifting from S1 S_1\,S1​ to S2S_2S2​.

Market supply curve for commercial drone delivery services shifting left from S1 to S2

Which of the following is most likely to have caused the shift from S1 S_1\,S1​ to S2S_2S2​?

A decrease in the market price of drone delivery services.

An increase in the cost of commercial liability insurance for drone operators combined with the withdrawal of a government subsidy for green logistics.

A technological breakthrough in battery manufacturing that lowers the production cost of long-range drones.

An increase in the market price of road-freight courier services, which are a substitute for drone deliveries.

1.3 Price determination in a competitive market Questions

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