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1.3 How prices are determined

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Question 111

A retailer sells bags of wood pellets for domestic heating. Customers now expect the price of wood pellets to rise next month. The retailer's current prices are unchanged.

Table 1 shows customers' weekly buying plans before and after their expectations changed.

Price per bagQuantity demanded beforeQuantity demanded after
£6800 bags1,050 bags
£8550 bags760 bags

Using Table 1, explain why the change in customers' buying plans is an increase in demand rather than an extension of quantity demanded.

[3]
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1.3 How prices are determined Questions

  1. GCSE
  2. /Economics
  3. /1.3 How prices are determined

236 exam-style questions on AQA GCSE Economics 1.3 How prices are determined, covering 1.3.1a Demand and the factors that influence it, 1.3.1b The demand curve, 1.3.2a Supply and the factors that influence it, 1.3.2b The supply curve, 1.3.3a Determining equilibrium price, 1.3.3b Applying diagrams and showing revenue, 1.3.4a Complements and substitutes, 1.3.4b Effects of changes on related markets, 1.3.5a Price elasticity of demand, 1.3.5b Factors affecting price elasticity of demand, 1.3.5c Measuring PED and its implications, 1.3.6a Price elasticity of supply, 1.3.6b Factors affecting price elasticity of supply, and 1.3.6c Measuring PES and its implications. Each one has a worked solution and a mark scheme showing where the marks go.

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