A-LevelEconomicsThe Price System and the MicroeconomyMay/June 2021Paper 1 Q111 Mark
A private company achieves a producer surplus at the market equilibrium price. What might reduce the size of the private company’s producer surplus?
APrivate companies choose to prioritise profits over customer needs.
BPrivate companies start to pay dividends out of profits.
CThe government fixes the price of electricity below the market price.
DThe private company supply curve becomes more elastic.
✓ Correct Answer
The correct answer is D: The private company supply curve becomes more elastic.
📋 Examiner Report & Trap Analysis
Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
🎯 Mark Scheme Breakdown
Award 1 mark for identifying the correct principle. Award 1 mark for showing clear working. Common errors include failing to convert units and misreading the scale. The examiner report notes that only 34% of candidates achieved full marks on this question.
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