1.3 Price determination in a competitive market

The diagram below shows a market supply curve, $S$ .

A market diagram showing a stable supply curve S, where price rises from P1 to P2 and quantity rises from Q1 to Q2.

The change in price from $P_1\,$ to $P_2\,$ and quantity from $Q_1\,$ to $Q_2\,$ could have been caused by

an increase in the wages of assembly-line workers.

a fall in the price of a complementary good.

a reduction in the rate of value-added tax (VAT) on the product.

a health report warning consumers of the long-term risks of the product.

1.3 Price determination in a competitive market Questions

The diagram below shows a market supply curve, $S$ .

A market diagram showing a stable supply curve S, where price rises from P1 to P2 and quantity rises from Q1 to Q2.

The change in price from $P_1\,$ to $P_2\,$ and quantity from $Q_1\,$ to $Q_2\,$ could have been caused by

an increase in the wages of assembly-line workers.

a fall in the price of a complementary good.

a reduction in the rate of value-added tax (VAT) on the product.

a health report warning consumers of the long-term risks of the product.