A ceramic tile producer's kilns are operating at full capacity. The producer could install additional kilns within two years.
Table 1 shows the estimated quantity of tiles supplied if the price rises and then remains at the higher level. All other market conditions remain unchanged.
| Period | Price per box | Quantity supplied per month |
|---|---|---|
| Before the price rise | £20 | 5,000 boxes |
| One month after the price rise | £22 | 5,200 boxes |
| Two years after the price rise | £22 | 6,000 boxes |
Using the information in Table 1, explain why supply is price inelastic one month after the price rise and why it is likely to be more price elastic after two years.
81 exam-style questions on OCR GCSE Economics 2.3 Supply, covering 2.3.1 What is supply, 2.3.2 Draw a supply curve using data, 2.3.3 Explain a supply curve, 2.3.4 Shifts and movements of the supply curve, 2.3.5 Causes and consequences of supply changes, 2.3.6 Price elasticity of supply, 2.3.7 Draw supply curves of different elasticity, and 2.3.8 Importance of price elasticity of supply. Each one has a worked solution and a mark scheme showing where the marks go.