Across the UK, manufacturers cut the prices of electric toothbrush handles as they compete for sales. Customers use each handle with replacement brush heads, which are bought separately.
Table 1 shows the weekly market demand and supply for replacement brush heads before and after the handle price cuts. Quantities are in thousands of pairs a week.
| Price per pair of replacement brush heads | Quantity demanded before | Quantity demanded after | Quantity supplied |
|---|---|---|---|
| £8 | 600 | 750 | 600 |
| £10 | 500 | 700 | 700 |
Using Table 1, explain how the cut in handle prices changes the equilibrium price and equilibrium quantity of replacement brush heads.
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.