A producers’ co-operative uses the same workers and weaving equipment to make picnic blankets and cushion covers. The price and cost of cushion covers did not change between the two periods.
| Period | Market price per picnic blanket | Cost of making one picnic blanket | Picnic blankets sold each week |
|---|---|---|---|
| Earlier period | £30 | £27 | 700 |
| Later period | £42 | £27 | 850 |
Using the information in the table, explain what the change in the market price suggests about the worth buyers place on picnic blankets. Suggest how the co-operative is likely to redistribute its workers and weaving equipment between its two products.
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.