A garden centre estimates its weekly demand for bags of peat-free compost. Assume incomes, tastes and the prices of other goods do not change.
| Price per bag | Bags demanded per week |
|---|---|
| £4 | 180 |
| £6 | 125 |
The garden centre raises the price per bag from £4 to £6. Which statement correctly describes what happens?
Quantity demanded falls by 125 bags per week, a contraction of demand shown by a movement up along the existing demand curve.
Quantity demanded falls by 55 bags per week, a contraction of demand shown by a movement up along the existing demand curve.
Demand falls by 125 bags per week, a decrease in demand shown by the whole demand curve shifting to the left.
Demand falls by 55 bags per week, a decrease in demand shown by the whole demand curve shifting to the left.
82 exam-style questions on OCR GCSE Economics 2.2 Demand, covering 2.2.1 What is demand, 2.2.2 Draw a demand curve using data, 2.2.3 Explain a demand curve, 2.2.4 Shifts and movements of the demand curve, 2.2.5 Causes and consequences of demand changes, 2.2.6 Price elasticity of demand, 2.2.7 Draw demand curves of different elasticity, and 2.2.8 Importance of price elasticity of demand. Each one has a worked solution and a mark scheme showing where the marks go.