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1.3 How prices are determined

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Question 124

A new sorting system lowers the costs of producing wool-insulation packs. The equilibrium price and quantity change as shown below.

Equilibrium price per packEquilibrium quantity per week
Before the new system£2540,000 packs
After the new system£2246,000 packs
a.

Explain why the new sorting system leads to a lower equilibrium price and a higher equilibrium quantity of wool-insulation packs.

[3]
b.

Calculate the change in the wool-insulation producers’ total revenue per week after the new system is introduced.

[2]
Markscheme

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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