Extract 1: Oakline desks Oakline produces study desks. It is considering a new production line. Managers expect higher output and lower average cost, but the equipment requires a large fixed payment.
| Measure | Current method | New line |
|---|---|---|
| Monthly output | 2,000 | 3,200 |
| Total cost | £150,000 | £208,000 |
| Selling price per desk | £95 | £88 |
| Workers | 40 | 40 |
Using Extract 1, calculate the current average cost per desk.
Using Extract 1, calculate the monthly profit using the new production line.
Analyse how the new line affects Oakline's productivity and average cost.
State two roles of producers in the economy.
Explain one reason why profit is important to Oakline.
Evaluate whether Oakline should adopt the new production line.
30 exam-style questions on OCR GCSE Economics 2.6 Production, covering 2.6.1 Role of producers, 2.6.2 Importance of production and productivity, 2.6.3 Calculate cost, revenue, profit and loss, 2.6.4 Explain cost, revenue, profit and loss, 2.6.5 Cost, revenue and profit for producers, and 2.6.6 Economies of scale. Each one has a worked solution and a mark scheme showing where the marks go.