ExpertMedium1 markMultiple Choice
AQA GCSE · Question 02 · How markets work
Which of the following could lead to a reduction in the quantity supplied of a product?
Which of the following could lead to a reduction in the quantity supplied of a product?
Answer options:
A.
A decrease in demand for the product
B.
A decrease in the cost of making the product
C.
An increase in the popularity of the product
D.
An increase in the price of the product
How to approach this question
Distinguish between a change in 'supply' (a shift of the curve) and a change in 'quantity supplied' (a movement along the curve). A change in quantity supplied is caused by a change in the product's own price. Consider which of the options would cause the price to fall, thus leading to a reduction in quantity supplied.
Full Answer
A.A decrease in demand for the product✓ Correct
The correct answer is A. A decrease in demand for the product leads to a lower equilibrium price, which in turn causes producers to reduce the quantity they are willing to supply (a movement along the supply curve).
A change in 'quantity supplied' refers to a movement along a fixed supply curve and is caused solely by a change in the price of the good itself. A 'change in supply' is a shift of the entire curve, caused by factors other than price (like production costs). A decrease in demand lowers the market price. In response to this lower price, suppliers will reduce the amount they offer for sale, which is a reduction in the quantity supplied.
Common mistakes
Confusing a change in 'quantity supplied' with a change in 'supply'. A decrease in the cost of making the product would cause an increase in supply, but the question asks about quantity supplied.
Practice the full AQA GCSE Economics Paper 1
27 questions · hints · full answers · grading
More questions from this exam
Q01Which of the following best describes the equilibrium price in a market?EasyQ03A firm can reduce its average costs in the long run by making effective use of a large machine. T...EasyQ04Which of the following would be included in the tertiary sector of an economy?EasyQ05Which of the following is an example of a variable cost?EasyQ06In which jobs are earnings likely to be highest?Easy