Two separate cases concern bottled water. In Case 1, one independent town shop raises its price per bottle by 10%, while competing shops keep their prices unchanged. In Case 2, bottled-water prices rise by 10% across all suppliers throughout the UK. Table 1 shows the initial price and weekly quantities sold.
| Case | Market measured | Initial price per bottle | Weekly quantity sold before the rise | Weekly quantity sold after the rise |
|---|---|---|---|---|
| 1 | One independent town shop | £2.00 | 400 bottles | 328 bottles |
| 2 | All UK suppliers | £2.00 | 20.0 million bottles | 19.4 million bottles |
Calculate the total revenue before and after the price rise in each case.
Explain why the change in total revenue differs between the two cases.
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.