Table 1 shows the monthly demand and supply for household removal services in a city before two separate changes.
| Price per removal | Quantity demanded (removals per month) | Quantity supplied (removals per month) |
|---|---|---|
| £300 | 1,200 | 600 |
| £350 | 1,050 | 750 |
| £400 | 900 | 900 |
| £450 | 750 | 1,050 |
| £500 | 600 | 1,200 |
Following the changes, quantity demanded decreases by 150 removals per month at every price and quantity supplied decreases by 450 removals per month at every price.
Calculate the new equilibrium price.
Explain, using the data, why the equilibrium price changes from its original level to the price calculated in part (a), even though demand has decreased.
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.