O-LevelEconomicsThe allocation of resources2281/12 · Oct/Nov 2025 · Q51 Mark

The diagram shows the supply and demand curves for a good. The initial market equilibrium is given at point E₁. There is a change in the market that leads to a new equilibrium at E₂. What is the cause of the change in the market equilibrium? [Figure 5.1]

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Adecrease in the price of a substitute good

Bdecrease in raw material prices

Can increase in the price of a substitute good

Dan increase in raw material prices

✓ Correct answer

C: an increase in the price of a substitute good

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Topic: The allocation of resources, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, Oct/Nov 2025 Paper 1 Variant 2, question 5.

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