Prices can change freely in a town's market for 40-litre bags of garden compost. The current price is £7 per bag.
| Price per bag | Quantity demanded (bags per week) | Quantity supplied (bags per week) |
|---|---|---|
| £7 | 1,000 | 700 |
| £8 | 900 | 900 |
Calculate the excess demand at the current price.
Explain how market forces would move this market to equilibrium. Use the information in the table in your answer.
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.