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1.3 How prices are determined

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Question 9

image The diagrams show two extreme demand curves. Which statement correctly compares the pricing power of the two firms?

[1]
A

Both firms lose the same proportion of sales after a price rise because both curves are demand curves

B

Firm X can raise its price above P* without losing any sales, while Firm Y loses all sales

C

Firm Y can raise its price within the range shown without reducing quantity demanded, while Firm X would lose demand above P*

D

Neither firm can change total revenue because quantity demanded is fixed for both products

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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