The market for coach journeys is initially in equilibrium. Following a rise in rail fares, demand for coach journeys increases. At the same time, higher fuel costs decrease the supply of coach journeys.
Which outcome must follow from these changes?
There is excess supply at the original price.
The new equilibrium quantity is higher than before.
The new equilibrium price is higher than before.
The original price remains the market-clearing price.
75 exam-style questions on OCR GCSE Economics 2.4 Price, covering 2.4.1 Price and distribution of resources, 2.4.2 Equilibrium price and quantity, 2.4.3 Draw the interaction of demand and supply, 2.4.4 Analyse the interaction of demand and supply, 2.4.5 Role of markets in allocating resources, and 2.4.6 Market forces and equilibrium. Each one has a worked solution and a mark scheme showing where the marks go.