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1.4 Production, costs, revenue and profit

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Question 65

A stone quarry increases its annual output of crushed stone after investing in production equipment.

Crushed stone produced per yearTotal cost per year
12,000 tonnes£360,000
24,000 tonnes£600,000
a.

Calculate the fall in the quarry's average cost per tonne. Show your working.

[3]
b.

Explain how the investment in production equipment could have caused this fall in average cost.

[2]
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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