(a)[8]
Explain how and why the price elasticity of supply of agricultural goods is different from that of manufactured goods.
(b)[12]
Discuss whether government subsidies paid to farmers are a beneficial policy.
Economics 9708 · AS & A Level · Price elasticity of supply
Price elasticity of supply — practice question
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Price elasticity of supply shows how responsive supply is to changes in price. Agricultural goods are usually more price inelastic (PES<1) than manufactured goods. The influences involved are perishability of product, specialised storage, growing period, capacity availability, ability to switch products, nature of additional costs etc.” …
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