Hilltop Farm can invest in refrigerated storage and irrigation. Table 1 shows estimates for the next harvest.
| Measure | Without investment | With investment |
|---|---|---|
| Price elasticity of supply | 0.30 | 1.10 |
| Saleable output | 600 tonnes | 820 tonnes |
| Forecast annual revenue | £510,000 | £680,000 |
| Initial investment cost | £0 | £420,000 |
Using Table 1, assess whether Hilltop Farm should invest to make its supply more price elastic.
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.