An independent printer produces paperback books. Following an increase in the price received per copy, the printer uses 75% of the production capacity that was previously unused. All other influences on supply remain unchanged.
| Information | Amount |
|---|---|
| Original price received per copy | £2.50 |
| New price received per copy | £2.70 |
| Original quantity supplied | 12,000 copies per month |
| Maximum production capacity | 18,000 copies per month |
Calculate the printer's price elasticity of supply over this price change. Show your working.
Explain what your answer to part (a) shows about the printer's response to the 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.