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1.4 Production, costs, revenue and profit

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Question 24

An archive digitisation business introduces an automated page-capture system. The business has enough customer orders to charge for every page it digitises.

Table 1 shows weekly information before and after the new system was introduced.

MeasureBefore the new systemAfter the new system
Pages digitised240,000336,000
Worker-hours800800
Average charge per 1,000 pages£120£120
Pages requiring re-scanning3.5%1.0%
Other costs (excluding the lease)£24,600£28,200
Page-capture system lease£0£8,040

Using Table 1, analyse the link between the change in labour productivity and the change in the business's weekly profit after the new system was introduced.

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Markscheme

1.4 Production, costs, revenue and profit Questions

  1. GCSE
  2. /Economics
  3. /1.4 Production, costs, revenue and profit

138 exam-style questions on AQA GCSE Economics 1.4 Production, costs, revenue and profit, covering 1.4.1a Business objectives, 1.4.1b Types of costs and revenue, 1.4.1c Calculating profit, 1.4.1d Profit as an incentive to produce, 1.4.1e Moral and ethical considerations, 1.4.2a Production versus productivity, 1.4.2b Factors and benefits of productivity, 1.4.3a Economies of scale and business behaviour, 1.4.3b Types of economy of scale, and 1.4.3c Diseconomies of scale. Each one has a worked solution and a mark scheme showing where the marks go.

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