Table 1 shows four pairs of circumstances at notebook manufacturers.
| Pair | Circumstance 1 | Circumstance 2 |
|---|---|---|
| 1 | Unused binding capacity | An additional batch can be completed within one day |
| 2 | Many rival notebook brands | Notebooks take a small share of buyers' income |
| 3 | A subsidy is paid for each notebook produced | The price of paper has fallen |
| 4 | 50,000 notebooks are produced each week | The current selling price is £2 per notebook |
The market price of notebooks rises. Which pair of circumstances is most likely to allow a manufacturer to make the largest proportionate increase in quantity supplied?
Unused binding capacity and an additional batch that can be completed within one day
A subsidy paid for each notebook produced and a lower price for paper
Production of 50,000 notebooks each week and a current selling price of £2 per notebook
Many rival notebook brands and notebooks taking a small share of buyers' income
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.