OCR GCSE Economics: Supply, price elasticity of supply and price determination (J205) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

The set below tests sections 2.3 (Supply) and 2.4 (Price) of Topic 2, OCR GCSE (9-1) Economics (J205), version 2.0, first assessment 2019. Nothing is tiered. Every figure is made up. If a topic feels shaky, start with the study guide or the revision notes. The course hub, checklist and diagnostics are also available.

Questions

1. State what is meant by supply. [2]

2. Three egg farms sell dozens of eggs per week at the prices shown.

Price per dozen	Farm A	Farm B	Farm C
£2	40	10	0
£3	60	30	20
£4	80	50	40

(a) Calculate market supply at each price. [2] (b) Explain one reason why the market supply curve slopes upward. [2]

3. In a town’s bicycle market, say whether each event causes a movement along the supply curve or a shift, and give the direction. (i) The price of bicycles rises. (ii) New technology cuts the cost of making each bicycle. (iii) A tax is placed on each bicycle made. (iv) Several makers leave the market. [4]

4. A potter raises the price of a mug from £20 to £25 and the quantity supplied rises from 80 to 84 a week. Calculate price elasticity of supply and say what the value shows. [4]

5. Explain two reasons why the supply of a seasonal fruit is price inelastic in the short run. [4]

6. Calculate PES and say whether supply is elastic, inelastic, unit elastic or perfectly inelastic. [4]

Product	% change in price	% change in quantity supplied
P	+10	+25
Q	+10	+10
R	+20	+4
S	+5	0

7. The table shows the market for table lamps in a town (per month).

Price (£)	Quantity demanded	Quantity supplied
20	500	140
30	400	220
40	300	300
50	200	380
60	100	460

(a) Identify the price and quantity at which the market clears. [2] (b) At £30, work out the size of the gap between demand and supply and name the situation. [2] (c) Explain how the price changes from £30 and why. [2]

8. A fashion trend raises demand for lamps. At £40, £44 and £50 quantity demanded becomes 372, 332 and 272. Quantity supplied at those prices is 300, 332 and 380. (a) Give the new market-clearing price and quantity. [2] (b) Find the percentage rise in price and in quantity compared with the first equilibrium. [2] (c) Work out how total revenue changes. [2] (d) Explain one effect on consumers and one on producers. [2]

9. A tax of £9 on each lamp made shifts the supply curve left. With the original demand, quantity demanded at £40, £44 and £50 is 300, 260 and 200. With the tax, quantity supplied is 228, 260 and 308. (a) Give the market-clearing price and quantity after the tax. [2] (b) Calculate how much more consumers pay per lamp and how much producers keep per lamp after paying the tax. [3] (c) Analyse the consequences for consumers and producers. [3]

10. Explain two roles of price in allocating resources in a market economy. [4]

11. A rise in demand for a product is expected. Evaluate the importance of price elasticity of supply for producers and consumers. [9]

Answers

1. Supply is the quantity of a good or service producers are willing [1] and able to sell at each price in a given period [1]. [2] Examiner insight: Saying only “what is sold” leaves the definition thin. Adding “willing and able” and “at each price” shows supply is a relationship, not one quantity.

2. (a) Add the farms at each price [1]: £2: 40 + 10 + 0 = 50; £3: 60 + 30 + 20 = 110; £4: 80 + 50 + 40 = 170 [1]. (b) A higher price raises revenue per dozen [1], so farms can cover rising costs and expand output, and more farms are attracted into supplying [1]. [4] Examiner insight: Show the sum at each price; a visible method lets an examiner follow your thinking even if one addition slips. Linking “higher price” to “more profitable” is what turns a description into an explanation.

3. (i) Movement along (extension) [1]; (ii) shift right [1]; (iii) shift left [1]; (iv) shift left [1]. [4] Examiner insight: Name both the type (movement or shift) and the direction, since stating only one leaves the answer incomplete.

4. % change in price = 5 ÷ 20 × 100 = 25% [1]; % change in quantity = 4 ÷ 80 × 100 = 5% [1]; PES = 5 ÷ 25 = 0.2 [1]. Supply is inelastic: output barely responds to the price rise [1]. [4] Examiner insight: Write the formula and each percentage. Dividing by the new value instead of the original is a common slip that changes the final answer.

5. Reason 1: fruit takes a season to grow, so farmers cannot raise output when price rises [1]; planting more now would not produce fruit this season [1]. Reason 2: fruit is perishable, so it cannot be stored and released later [1], which limits the quantity available when price rises [1]. [4] Examiner insight: Name the factor, then follow it through to output. A bare mention of “time” or “storage” has not yet explained anything.

6. P: 25 ÷ 10 = 2.5, elastic [1]; Q: 10 ÷ 10 = 1, unit elastic [1]; R: 4 ÷ 20 = 0.2, inelastic [1]; S: 0 ÷ 5 = 0, perfectly inelastic [1]. [4] Examiner insight: Give a number and a label. Judge elastic or inelastic by comparing PES with 1, not by how big the percentages look.

7. (a) Quantity demanded equals quantity supplied at £40 and 300 lamps [1] [1]. (b) At £30 demand is 400 and supply is 220, so 400 − 220 = 180 excess demand (shortage) [1] [1]. (c) With a shortage, buyers compete for scarce lamps and producers can sell at higher prices [1]; price rises, which contracts demand and extends supply, until they are equal at £40 [1]. [6] Examiner insight: State the amount and the type of imbalance, then explain the movement in price with a reason linked to buyers and sellers; “price goes up” alone is a description.

8. (a) Demand equals supply at £44 [1] and 332 lamps [1]. (b) Price: 4 ÷ 40 × 100 = 10% [1]; quantity: 32 ÷ 300 × 100 = 10.7% [1]. (c) Old revenue 40 × 300 = £12,000; new revenue 44 × 332 = £14,608 [1]; increase of £2,608 [1]. (d) Consumers pay a higher price (£44 instead of £40) [1]; producers sell more lamps at a higher price, so revenue rises [1]. [8] Examiner insight: Work out percentage changes from the original figures and show the revenue sums. Use a number from the table in (d) to keep the effects tied to the data.

9. (a) Demand equals supply at £44 and 260 lamps [1] [1]. (b) Consumers pay 44 − 40 = £4 more [1]. Producers receive 44 − 9 = £35 after the tax [1], which is £5 less than the old £40 [1]. (c) Consumers pay more and buy fewer lamps (300 to 260, a fall of 13.3%) [1]. Producers receive less per lamp and sell fewer, so revenue after tax falls from £12,000 to 35 × 260 = £9,100 [1]. The government gains 9 × 260 = £2,340 in tax, so the burden is shared between consumers and producers [1]. [8] Examiner insight: Separate the price consumers pay from the amount producers keep; mixing them is the usual way to lose marks. Back each consequence with a figure.

10. Role 1: price acts as a signal [1]. A rising price shows that consumers want more of the good, so producers move resources towards it [1]. Role 2: price rations scarce goods [1]. Those willing and able to pay get the goods, so resources go to the uses buyers value most [1]. [4] Examiner insight: Name each role, then complete the chain to resources or output; the second mark in each pair depends on the link to allocation.

11. Definition: PES measures how much quantity supplied responds to a price change [1]. Producers with elastic supply can raise output quickly and sell more as demand rises [1]; those with inelastic supply cannot, so they gain from the higher price but miss extra sales [1]. Knowing PES helps firms plan stocks, capacity and hiring [1]. Consumers: with inelastic supply the demand rise mostly raises price, with shortages persisting [1]; with elastic supply more is available at a smaller price rise [1]. Determinants such as spare capacity, stocks and time decide which case applies [1]. Evaluation: PES is higher in the long run, so producers’ advantage and consumers’ loss from an inelastic market are temporary [1]. Judgement: PES matters most when demand moves suddenly and capacity is scarce; with idle capacity or stocks it matters less [1]. [9] Examiner insight: Apply the analysis to both groups and finish with a reasoned judgement that mentions time or spare capacity; a list of advantages, however long, tends to stay at description.

Where marks are usually lost

• Not turning changes into percentages before dividing in PES.
• Using the new figure as the denominator instead of the starting figure.
• Treating a move caused by the product’s own price as if the supply curve had shifted.
• Describing a new price but not the new quantity.
• Leaving out units, labels or the words “excess demand” and “excess supply”.
• Explaining a cause on a diagram without saying which curve moves.
• Defining PES in the answer but not applying it to the product in the question.
• Evaluation that says “it depends” and never names the factor it hinges on.

Next steps

• Revisit the study guide and revision notes.
• Mark sections 2.3 and 2.4 on the checklist and browse the wider course hub.
• Try a free 10-minute diagnostic next.
• Book a free trial class.

Official syllabus

OCR GCSE (9-1) Economics (J205). Version 2.0, June 2026. First assessment 2019. The checklist used here is Topic 2, sections 2.3 and 2.4.