AQA GCSE · Economics 8136
5 multiple-choice questions marked as you go, and 1 written questions with worked solutions. All on Price elasticity of supply.
A company produces artisanal furniture. When the price of a dining table rises from \(£800\) to \(£1,000\), the firm increases its monthly production from 40 units to 45 units. Calculate the price elasticity of supply (PES) for this firm and identify the nature of its supply.
A firm producing specialized medical equipment currently supplies \(200\) units per month at a market price of \(£5,000\) per unit. Due to a sudden increase in global demand, the market price rises to \(£6,500\). However, because the firm requires highly skilled labour and specific raw materials that are difficult to source quickly, it can only increase its production to \(220\) units per month.
Calculate the Price Elasticity of Supply (PES) and identify the nature of the supply.
A manufacturing firm operates at full capacity and uses highly specialized labor. If the market price for its product rises, which statement best describes the price elasticity of supply (PES) and the likely appearance of the supply curve on a diagram?
A luxury car manufacturer realizes that at a price of \(£40,000\), they supply 200 units. When the price increases to \(£50,000\), the quantity supplied increases to 220 units. Calculate the Price Elasticity of Supply (PES) and identify if the supply is elastic or inelastic.
A bicycle manufacturer monitors how their production levels respond to changes in the market price. The provided diagram shows the firm's supply curve for a specific model of mountain bike.
Using the data in the diagram, calculate the price elasticity of supply (PES) for the movement from point A to point B and identify the nature of the supply.
If the market price for organic wheat increases from \(£200\) to \(£250\) per tonne and the quantity supplied by farmers rises from \(1,000\) to \(1,100\) tonnes, calculate the price elasticity of supply (PES) and state whether the supply is elastic or inelastic.
Write your answer out first, then check it against the worked solution.
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