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1.2.7 Price mechanism

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Question 9

In the UK market for academic support, hourly rates for tutors vary. For example:

  • Local authority-funded after-school study group tutoring: £12.50 per hour
  • Elite private 1-to-1 academic coaching: £55.00–£140.00 per hour

An experienced subject specialist tutor can choose to allocate their hours to municipal study groups, private tutoring clients, or both.

Using the data above, which one of the following is a function of the price mechanism in the market for elite private tutoring?

Eliminating a shortage of elite tutoring slots by allowing the hourly rate of private tutoring to fall

Acting as a signal to subject specialist tutors when deciding whether to offer their services to private tutoring clients

Encouraging local authorities to set maximum price limits for municipal tutoring services

Incentivising specialist tutors to offer their services exclusively to municipal after-school study groups

1.2.7 Price mechanism Questions

  1. A Level
  2. /Economics
  3. /1.2.7 Price mechanism