A ferry operator raises its passenger fare by 10% and then leaves the fare unchanged. Demand is less price elastic during the first week than it is after one year.
Which of the following best explains this difference?
The operator has had longer to add sailings, making passenger demand more responsive.
Waiting one year changes the 10% fare rise into a larger percentage change.
The number of journeys sold over a year determines how responsive demand becomes.
Travellers have had longer to find alternative routes or change their travel plans.
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.