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3.8 Limitations of markets

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Question 106

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The diagram shows the market for a product that creates a negative externality. Which change is shown after the government imposes an indirect tax?

[1]
A

Demand shifts from D₁ to D₂

B

Supply shifts from S₂ to S₁

C

Supply shifts left from S₁ to S₂, raising price and reducing quantity

D

Movement along S₁ to a lower price and higher quantity

Markscheme

3.8 Limitations of markets Questions

  1. GCSE
  2. /Economics
  3. /3.8 Limitations of markets

127 exam-style questions on OCR GCSE Economics 3.8 Limitations of markets, covering 3.8.1 Positive and negative externalities, 3.8.2 Policies to correct externalities, 3.8.3 Impact of externality policies, and 3.8.4 Costs and benefits of externality policies. Each one has a worked solution and a mark scheme showing where the marks go.

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