Frequent electricity shortages often lead to power cuts in the Lebanon. If the Lebanese economy keeps expanding, the daily difference between supply and demand could widen. The Lebanese Government plans to construct more power stations, although there is a danger that the social costs of running them may exceed the social benefits.
(a)[2]
Define the term ‘demand’.
(b)[4]
Explain what effect an imbalance between supply and demand is likely to have on price and the quantity traded.
(c)[6]
Analyse why economic growth may raise demand for electricity.
(d)[8]
Discuss whether the social costs of operating power stations are likely to be greater than the social benefits.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Readiness to buy a product” …