A forestry business grows trees and sells construction timber. The market price of its timber rises by 10% and remains at the higher level. The table shows the business's planned annual quantity supplied over two different periods.
| Time | Planned quantity supplied (cubic metres per year) |
|---|---|
| Before the price rise | 10,000 |
| One month after the price rise | 10,200 |
| 40 years after the price rise | 12,000 |
Calculate the percentage increase in the planned annual quantity supplied after one month and after 40 years.
Using your answers to part (a), compare the price elasticity of supply after one month and after 40 years.
Explain one reason for the difference in the forestry business's price elasticity of supply over the two periods.
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.