Inflation raises firms' selling prices but also increases wage and raw-material costs. What is the most accurate conclusion for producers?
Profit must rise because prices are higher
Profit must fall because costs are higher
Inflation affects only consumers
The effect on profit depends on how revenue changes relative to costs
30 exam-style questions on OCR GCSE Economics 3.4 Price stability, covering 3.4.1 Price stability and inflation, 3.4.2 Measuring inflation with CPI, 3.4.3 Calculate the effect of inflation, 3.4.4 Analyse inflation figures, and 3.4.5 Causes and consequences of inflation. Each one has a worked solution and a mark scheme showing where the marks go.