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1.2.6 Price determination

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Question 5

Extract A

The soaring cost of last-mile delivery drones

High-specification carbon-fibre composites serve as the primary structural material for commercial delivery drones. Manufacturers of these autonomous aircraft are facing severe cost pressures as global aerospace demand outstrips the production capacity of high-grade carbon fiber. The cost of aerospace-grade carbon composite sheets has soared from £120 to over £450 per unit. At the same time, the market price of delivery drones has climbed rapidly, driven by these escalating manufacturing costs alongside a dramatic rise in demand from retail conglomerates seeking to implement rapid, zero-emission last-mile delivery networks.

With reference to Extract A, explain the likely reasons for the change in the price of commercial delivery drones. Include a supply and demand diagram in your answer.

Exemplar Supply and Demand Shift

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1.2.6 Price determination Questions

  1. A Level
  2. /Economics
  3. /1.2.6 Price determination