O-LevelEconomicsThe allocation of resources2281/11 · May/June 2018 · Q51 Mark

In the diagram, suppliers have set the price of a product at Ps. Economic theory predicts that the equilibrium price of the product will rise to PE. What is the reason for this movement in price?

This question uses a diagram from the original paper, which isn't shown here. Open the full paper from the past papers archive to see it.

ADemand for the product will increase.

BNo more of the product can be supplied.

CSome consumers are willing to pay higher prices.

DSuppliers are facing rising costs.

✓ Correct answer

C: Some consumers are willing to pay higher prices.

Oracle Prep sorts past-paper questions by topic, so you can drill The allocation of resources and see which topics are most likely to come up next.

Topic: The allocation of resources, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2018 Paper 1 Variant 1, question 5.

Questions and mark schemes are from past examination papers and remain the copyright of the exam board. How Oracle Prep builds its content