A typical household considering either service has an income of £3,000 in the month when it would make the purchase. Each provider plans to raise its own price by 10%. Prices charged by alternative providers will not change.
Table 1 shows information about the services.
| Service | Current price | Availability of closely similar services | Timing of purchase |
|---|---|---|---|
| Emergency electrical repair following a complete loss of power | £150 | No other provider can attend when the repair is needed | Must be booked immediately to restore power |
| Family-history research report | £600 | Six other researchers offer closely similar reports | Can be postponed for at least 12 months |
Using Table 1, explain which provider is likely to experience the larger percentage fall in quantity demanded for its service following the 10% price rise.
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.