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1.2.7 Price mechanism

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Question 10

In the UK, monthly fees for gym memberships vary. For example, the following charges can be made for access to fitness facilities:

  • Municipal (local authority) leisure-centre membership: £22.50 per month
  • Private premium fitness club membership: £55.00–£195.00 per month

A personal trainer or fitness instructor can choose to offer sessions at municipal centres, private fitness clubs, or both.

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

A

Acting as a signal to personal trainers when deciding whether to offer their services at private fitness clubs

B

Eliminating a shortage of private fitness spaces by allowing the price of private club memberships to fall

C

Encouraging government intervention to set national physical activity targets

D

Incentivising fitness instructors to offer only municipal leisure-centre sessions

Markscheme

1.2.7 Price mechanism Questions

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

16 exam-style questions on Edexcel A A Level Economics 1.2.7 Price mechanism. Each one has a worked solution and a mark scheme showing where the marks go.

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