OxfordAQA International GCSE Economics: Related markets and price elasticity of demand and supply (9214) – 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.

These questions cover sections 3.1.3.4 to 3.1.3.6 of the OxfordAQA International GCSE Economics (9214) specification, for exams from May/June 2025 onwards. All countries, firms and figures are invented. Read the study guide or the revision notes first. See also the course hub, the checklist and the free diagnostics. Treat PED as negative and say so in your working.

Questions

1. Give the formula for price elasticity of demand. When a firm raises its price by 8%, quantity demanded drops by 12%. Work out PED and classify demand. [3]

2. (a) Say whether each pair is more likely to be complements or substitutes: pasta and pasta sauce; bus tickets and taxi rides; smartphones and phone cases. [3] (b) Explain what happens to demand for bus tickets if taxi fares rise. [2]

3. The price of Juice X rises from 4.00 to 4.40. Weekly demand for Juice Y rises from 1,200 to 1,296 cartons. (a) Calculate cross elasticity of demand. [3] (b) State the relationship between the two brands. [1]

4. A tailor raises the price of a school shirt from 10 to 12 and increases weekly output from 600 to 630. (a) Calculate price elasticity of supply. [3] (b) Explain one factor that may explain this result. [2]

5. A ferry operator cuts its fare from 20 to 18 and passengers rise from 1,000 to 1,150 a week. (a) Calculate PED. [2] (b) Work out total revenue at each fare. [2] (c) Explain what the result shows about the best pricing decision. [2]

6. Town C’s taxi trips have PED of −0.4. Fares are 8 and there are 3,000 trips a week. The fare rises by 25%. (a) Calculate the percentage change in trips. [2] (b) Calculate the new number of trips. [1] (c) Work out revenue at each fare and explain the change. [3]

7. Explain two reasons why demand for household tap water is likely to be more price inelastic than demand for one brand of bottled water. [4]

8. A disease cuts the supply of cattle in Country D. Explain the likely effects on the markets for beef, chicken (a substitute for beef) and bread rolls used for beef burgers. [6]

9. In market M, PES is 0.3. In market N, PES is 2.0. In each, price rises by 15%. (a) Calculate the percentage change in quantity supplied in each market. [2] (b) Explain which market can respond better to a surge in demand, and what this means for buyers. [3]

10. A swimming pool cuts the price of a day ticket from 5.00 to 4.50. Sales rise from 400 to 428 a week. Ignoring fixed costs, each ticket costs 2.00 to serve. (a) Calculate PED. [2] (b) Work out revenue at each price. [2] (c) Evaluate whether the price cut was a good decision. [4]

11. The price of Brand R coffee machines rises 12%. Demand for Brand S coffee machines rises 9% and demand for capsules that only fit Brand R falls 6%. (a) Calculate cross elasticity of demand between R and S. [2] (b) Calculate cross elasticity of demand between R machines and the capsules. [2] (c) Explain what each sign shows. [2] (d) Explain why a seller of Brand R capsules should watch the price of Brand R machines. [2]

12. In Country A, fishing crews land and sell 10,000 tonnes of fish in a typical season at 100 a tonne. A very good season raises the quantity sold by 20%. PED for fish is −0.5. (a) Calculate the percentage change in price needed. [2] (b) Work out the crews’ revenue at the old and new price. [2] (c) Explain why the crews may be worse off despite selling more. [2] (d) State one reason why this result may not hold in practice. [1]

Answers

1. PED = (% change in Qd) ÷ (% change in price) [1]. −12 ÷ 8 = −1.5 [1]. Size is above 1, so demand is elastic [1]. [3] Examiner insight: A number alone is weak. Answers that finish with the word elastic or inelastic and the reason (above or below 1) show the interpretation the question asks for.

2. (a) Pasta and sauce: complements [1]. Bus and taxi: substitutes [1]. Smartphones and cases: complements [1]. (b) Some travellers switch from taxis to buses [1], so demand for bus tickets shifts right [1]. [5] Examiner insight: Use the word shift for another good’s price. Calling it a movement along the bus curve is a common slip.

3. (a) Price: (4.40 − 4.00) ÷ 4.00 × 100 = +10% [1]. Quantity of Y: (1,296 − 1,200) ÷ 1,200 × 100 = +8% [1]. XED = 8 ÷ 10 = +0.8 [1]. (b) Positive, so the two juices are substitutes [1]. [4] Examiner insight: The demand for good A is the numerator and the price of good B the denominator. Reversing them is a frequent source of lost credit.

4. (a) Price: +20% [1]. Quantity: (630 − 600) ÷ 600 = +5% [1]. PES = 5 ÷ 20 = 0.25, which is inelastic [1]. (b) Spare capacity may be low, so the tailor cannot raise output quickly [1]. Without idle machines or stocks, output can barely rise within a few weeks [1]. [5] Examiner insight: A factor named but not linked to speed of response is a list item, not an explanation. Add the because.

5. (a) Price: (18 − 20) ÷ 20 = −10% [1]. Quantity: +15%. PED = 15 ÷ −10 = −1.5 [1]. (b) Before: 20 × 1,000 = 20,000 [1]. After: 18 × 1,150 = 20,700 [1]. (c) Demand is elastic, so a price cut raises revenue, here by 700 [1]. Costs must also be checked, because more passengers may raise running costs [1]. [6] Examiner insight: Revenue and profit are different. Commenting on costs is a sign you understand what the data cannot tell you.

6. (a) Rearranging PED = % change in quantity ÷ % change in price [1], trips change by −0.4 × 25 = −10% [1]. (b) 3,000 × 0.90 = 2,700 trips [1]. (c) New fare 8 × 1.25 = 10. Before: 8 × 3,000 = 24,000 [1]. After: 10 × 2,700 = 27,000 [1]. Revenue rises because demand is inelastic, so the fall in trips is proportionately smaller than the rise in fare [1]. [6] Examiner insight: Show the new price as well as the new quantity. Mixing the old price with the new quantity gives the wrong revenue.

7. Reason 1: tap water is a necessity for drinking, washing and cooking [1], so buyers keep using nearly the same amount if the price rises [1]. Reason 2: one brand of bottled water has many close substitutes, including other brands and tap water [1], so buyers switch when its price rises, which makes it more elastic [1]. [4] Examiner insight: Comparison questions reward a clear contrast. State why one good is inelastic and the other elastic, not just one of them.

8. Beef supply shifts left [1], so beef price rises and quantity falls [1]. Chicken is a substitute, so demand for chicken shifts right [1]. Its price and quantity rise [1]. Bread rolls are complements, so fewer burgers means demand for rolls shifts left [1], and their price and quantity fall [1]. [6] Examiner insight: A chain scores when each link names the curve and its direction. Writing only that the price goes up in each market leaves the reasoning out.

9. (a) M: 0.3 × 15 = 4.5% [1]. N: 2.0 × 15 = 30% [1]. (b) Market N responds better, because output rises by far more for the same price rise [1]. Buyers in M face larger and longer price increases, since supply cannot grow to meet demand [1]. Buyers in N get more goods at a smaller price rise [1]. [5] Examiner insight: Link the answer to the consumer, since the question asks what it means for buyers. Stopping at the calculation leaves that out.

10. (a) Price: −10% [1]. Quantity: +7%. PED = 7 ÷ −10 = −0.7 [1]. (b) Before: 5.00 × 400 = 2,000. After: 4.50 × 428 = 1,926 [1]. Revenue falls by 74 [1]. (c) Profit before: (5.00 − 2.00) × 400 = 1,200. After: (4.50 − 2.00) × 428 = 1,070 [1]. Demand is inelastic, so the cut lowered revenue and profit [1]. A cut could still help if it wins long-run loyalty or market share [1]. On these figures, the decision was poor, unless the pool has a longer-term aim [1]. [8] Examiner insight: Evaluation needs a judgement backed by the figures. A balanced list with no conclusion is incomplete.

11. (a) Quantity of S +9%, price of R +12% [1]. XED = 9 ÷ 12 = +0.75 [1]. (b) Quantity of capsules −6%, price of R +12% [1]. XED = −6 ÷ 12 = −0.5 [1]. (c) Positive XED means R and S are substitutes [1]. Negative means R machines and the capsules are complements [1]. (d) Capsule demand depends on how many Brand R machines are in use [1]. A rise in R’s price cuts machine sales, so fewer capsules are needed [1]. [8] Examiner insight: Keep the sign. Dropping the minus sign removes the very information that tells you complements from substitutes.

12. (a) % change in price = % change in quantity ÷ PED = 20 ÷ −0.5 = −40% [1]. The minus sign shows that price must fall [1]. (b) New price 100 × 0.60 = 60. Before: 100 × 10,000 = 1,000,000. After: 60 × 12,000 = 720,000 [1]. Revenue falls by 280,000 [1]. (c) Demand is inelastic, so the large price fall is only partly offset by extra sales [1]. Revenue falls even though quantity sold rises [1]. (d) Some of the catch may be frozen or exported, which keeps the price from falling so far [1]. [7] Examiner insight: Real markets have stocks and trade. Mentioning a limit shows evaluation, but it must be tied to the reasoning above.

Where marks are usually lost

• Working out each percentage change from the new figure rather than the original.
• Turning the elasticity fraction upside down.
• Leaving out the word elastic or inelastic after the number.
• Dropping the sign of cross elasticity.
• Describing a knock-on effect with no shift of a named curve.
• Confusing revenue with profit.
• Giving a factor with no explanation of why it matters.
• Mixing old prices with new quantities in revenue sums.

Next steps

• Re-read the revision notes and the study guide.
• Check coverage on the printable checklist and visit the course hub.
• Take one of the free 10-minute diagnostics.
• Book a free trial class.

Official syllabus

Source: OxfordAQA International GCSE Economics (9214), specification for exams from May/June 2025, published by OxfordAQA.