Demand for solar panels rises, increasing their price. Firms respond by moving labour and capital into panel production, and output expands. What does this best demonstrate?
A higher price guarantees equal access for all consumers
Resources move only when government instructs firms
The price rise removes the opportunity cost of production
Price signals stronger consumer demand and creates an incentive to reallocate resources
30 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.