Households become more willing to buy clay roof tiles, and the market price of clay roof tiles rises. Land, labour and capital can move between clay roof-tile production and other uses.
What is most likely to happen as producers respond to the higher price?
Land, labour and capital remain in their existing uses because prices ration buyers rather than guide producers
Land, labour and capital move towards lower-priced products because these products are more affordable to consumers
Land, labour and capital move away from clay roof-tile production because a higher price reduces quantity demanded
Land, labour and capital move towards clay roof-tile production as the return from producing clay roof tiles rises
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.