GCSE ECONOMICS EVALUATION EXAMS QUESTIONS AND
SOLUTIONS 2025/2026 GRADED A+
✔✔Perfectly Inelastic Demand Curve - ✔✔A completely vertical demand curve showing
price having no effect on quantity demanded.
The PED is 0.
(PED = 0 / %P)
✔✔Perfectly Elastic Demand Curve - ✔✔A completely horizontal demand curve
showing an increase in price causing no quantity to be demanded.
The PED is ∞.
(PED = %Qd / 0)
✔✔Importance of PED for CONSUMERS - ✔✔- Consumers purchasing goods with
inelastic demand are affected by this, as governments know that they can impose taxes
on the product and not suffer drawbacks as consumers will continue to buy the product.
- e.g. cigarettes
- This is also used by railway companies, which raise prices during rush hour, when
tickets have inelastic demand.
✔✔Importance of PED for PRODUCERS - ✔✔- PED allows producers to make
decisions based on the elasticity on the product they are supplying.
- If the product is price inelastic, producers can raise the price, as the decease in
quantity demanded is less than the raise and therefore more revenue is earned.
- If the product is price elastic, producers lower the price, as the increase in quantity
demanded is greater than the decrease in price, so more revenue is earned.
✔✔Price Discrimination - ✔✔The division of consumers into groups based on how much
they will pay for a good.
e.g. Peak times and off-peak times
✔✔Primary Product Dependency - ✔✔- This is where developing countries rely heavily
on the exports of primary products such as ores or agricultural goods.
- This is bad as primary products are unsustainable in the long term, and a fall in price
can mean the country is heavily affected.
,✔✔Supply - ✔✔The ability and willingness of firms to provide goods and services at
each price in a given time period.
✔✔Law of Supply - ✔✔For most products, the quantity supplied varies directly with its
price.
✔✔Individual Supply - ✔✔The supply of a good or service by an individual producer
✔✔Market Supply - ✔✔The total supply of a good or service as a result of adding
together all individual producer's supplies.
✔✔Supply Curve - ✔✔P = Price
Q = Quantity Supplied
S = Supply
As price increases, quantity supplied increases.
✔✔Movements along the supply curve - ✔✔Only price causes movements along the
supply curve.
A movement up the supply curve is called an expansion.
A movement down the supply curve is called a contraction.
✔✔Expansion of Supply - ✔✔An increase in quantity supplied due to a rise in price is
shown as an upward movement on the supply curve.
Both the quantity supplied and price of the product increase.
✔✔Contraction of Supply - ✔✔A decrease in quantity supplied due to a fall in price is
shown as a downward movement on the supply curve.
Both the price and quantity of the product fall.
✔✔Shifts of the supply curve - ✔✔Different factors cause shifts of the supply curve.
(PINTS WC)
An increase in supply is shown by a rightward shift of the supply curve, as the price falls
and quantity supplied increases.
A decrease in supply is shown by a leftward shift of the supply curve , as the price rises
and quantity supplied decreases.
✔✔Causes of shifts of the supply curve - ✔✔P - Productivity
, I - Indirect Taxes
N - Number of Firms
T - Technology
S - Subsidies
W - Weather (agriculture)
C - Costs of Production
✔✔PINTS WC - Productivity - ✔✔- A rise or fall in productivity or production costs can
mean large changes in output for a firm, and therefore how much they are able to
supply.
✔✔PINTS WC - Indirect Taxes - ✔✔- An indirect tax on the product a producer is
supplying would lead to a rise in costs and therefore a fall in quantity supplied at each
price.
✔✔PINTS WC - Number of Firms - ✔✔- An increase in the number of firms or the size
of existing firms would mean an increase in supply, shifting the supply curve rightward.
✔✔PINTS WC - Technology - ✔✔- New technology can lower costs of production and
allow more to be supplied at a lower cost.
✔✔PINTS WC - Subsidies - ✔✔- If a firm recieves a government subsidy, it would allow
more to be supplied at every price, leading to a rightward shift in the supply curve.
✔✔PINTS WC - Weather - ✔✔- Different weather conditions can affect the supply from
the agricultural sector. For example, if there is a drought, supply of different crops would
fall.
✔✔PINTS WC - Costs of Production - ✔✔- If costs of production in a firm increase, it
means they are unable to supply as much as before at the same price and therefore
supply decreases, and vice versa.
✔✔Effects of shifts of the supply curve - ✔✔Economies of scale - As a firm is able to
supply more at every price, economies of scale occur and average costs of production
fall. This is to higher profits.
Efficiency - Being able to produce more with the same resources leads to higher
productivity and efficiency.
SOLUTIONS 2025/2026 GRADED A+
✔✔Perfectly Inelastic Demand Curve - ✔✔A completely vertical demand curve showing
price having no effect on quantity demanded.
The PED is 0.
(PED = 0 / %P)
✔✔Perfectly Elastic Demand Curve - ✔✔A completely horizontal demand curve
showing an increase in price causing no quantity to be demanded.
The PED is ∞.
(PED = %Qd / 0)
✔✔Importance of PED for CONSUMERS - ✔✔- Consumers purchasing goods with
inelastic demand are affected by this, as governments know that they can impose taxes
on the product and not suffer drawbacks as consumers will continue to buy the product.
- e.g. cigarettes
- This is also used by railway companies, which raise prices during rush hour, when
tickets have inelastic demand.
✔✔Importance of PED for PRODUCERS - ✔✔- PED allows producers to make
decisions based on the elasticity on the product they are supplying.
- If the product is price inelastic, producers can raise the price, as the decease in
quantity demanded is less than the raise and therefore more revenue is earned.
- If the product is price elastic, producers lower the price, as the increase in quantity
demanded is greater than the decrease in price, so more revenue is earned.
✔✔Price Discrimination - ✔✔The division of consumers into groups based on how much
they will pay for a good.
e.g. Peak times and off-peak times
✔✔Primary Product Dependency - ✔✔- This is where developing countries rely heavily
on the exports of primary products such as ores or agricultural goods.
- This is bad as primary products are unsustainable in the long term, and a fall in price
can mean the country is heavily affected.
,✔✔Supply - ✔✔The ability and willingness of firms to provide goods and services at
each price in a given time period.
✔✔Law of Supply - ✔✔For most products, the quantity supplied varies directly with its
price.
✔✔Individual Supply - ✔✔The supply of a good or service by an individual producer
✔✔Market Supply - ✔✔The total supply of a good or service as a result of adding
together all individual producer's supplies.
✔✔Supply Curve - ✔✔P = Price
Q = Quantity Supplied
S = Supply
As price increases, quantity supplied increases.
✔✔Movements along the supply curve - ✔✔Only price causes movements along the
supply curve.
A movement up the supply curve is called an expansion.
A movement down the supply curve is called a contraction.
✔✔Expansion of Supply - ✔✔An increase in quantity supplied due to a rise in price is
shown as an upward movement on the supply curve.
Both the quantity supplied and price of the product increase.
✔✔Contraction of Supply - ✔✔A decrease in quantity supplied due to a fall in price is
shown as a downward movement on the supply curve.
Both the price and quantity of the product fall.
✔✔Shifts of the supply curve - ✔✔Different factors cause shifts of the supply curve.
(PINTS WC)
An increase in supply is shown by a rightward shift of the supply curve, as the price falls
and quantity supplied increases.
A decrease in supply is shown by a leftward shift of the supply curve , as the price rises
and quantity supplied decreases.
✔✔Causes of shifts of the supply curve - ✔✔P - Productivity
, I - Indirect Taxes
N - Number of Firms
T - Technology
S - Subsidies
W - Weather (agriculture)
C - Costs of Production
✔✔PINTS WC - Productivity - ✔✔- A rise or fall in productivity or production costs can
mean large changes in output for a firm, and therefore how much they are able to
supply.
✔✔PINTS WC - Indirect Taxes - ✔✔- An indirect tax on the product a producer is
supplying would lead to a rise in costs and therefore a fall in quantity supplied at each
price.
✔✔PINTS WC - Number of Firms - ✔✔- An increase in the number of firms or the size
of existing firms would mean an increase in supply, shifting the supply curve rightward.
✔✔PINTS WC - Technology - ✔✔- New technology can lower costs of production and
allow more to be supplied at a lower cost.
✔✔PINTS WC - Subsidies - ✔✔- If a firm recieves a government subsidy, it would allow
more to be supplied at every price, leading to a rightward shift in the supply curve.
✔✔PINTS WC - Weather - ✔✔- Different weather conditions can affect the supply from
the agricultural sector. For example, if there is a drought, supply of different crops would
fall.
✔✔PINTS WC - Costs of Production - ✔✔- If costs of production in a firm increase, it
means they are unable to supply as much as before at the same price and therefore
supply decreases, and vice versa.
✔✔Effects of shifts of the supply curve - ✔✔Economies of scale - As a firm is able to
supply more at every price, economies of scale occur and average costs of production
fall. This is to higher profits.
Efficiency - Being able to produce more with the same resources leads to higher
productivity and efficiency.
