A-LevelEconomicsThe Price System and the MicroeconomyOct/Nov 2020Paper 1 Q131 Mark

A firm estimates that the price elasticity of supply of its product is 0.4. Should the firm be concerned by this figure?

Q: What topic does this question test?

This question tests The Price System and the Microeconomy in A-Level Economics (syllabus code 9708). It is worth 1 mark.

ANo, as it implies that the firm will be able to raise revenue by raising price.

BNo, as it suggests there are few substitutes for the product.

CYes, as it means that demand for its product is increasing at a slow rate.

DYes, as it shows that the firm is not able to adjust supply easily when demand changes.

✓ Correct Answer

The correct answer is D: Yes, as it shows that the firm is not able to adjust supply easily when demand changes.

📋 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.

🔒

Unlock the Examiner's Analysis

Join thousands of Cambridge students already using Oracle Prep

About This A-Level Economics Question

Topic

This multiple-choice question tests The Price System and the Microeconomy in A-Level Economics (syllabus code 9708). It is worth 1 mark.

Source

This question appeared in the Cambridge A-Level Economics Oct/Nov 2020 examination, Paper 1 Variant 2.

Practice on Oracle Prep

Oracle Prep provides AI-powered practice for all Cambridge O-Level and A-Level subjects. Our platform includes topic predictions with 87.7% accuracy, AI essay grading, and a comprehensive question bank spanning 25 years of past papers across 29 subjects.