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O Levels Economics (2281)•2281/12/O/N/24
Question 6 from 2281/12/O/N/24

Explanation

Price increase causes movement along the supply curve, but exact quantity change requires extrapolation not matching choices Steps:

  • Identify supply at $12: 160 units from table.
  • Observe pattern: supply increases by 40 units per 2pricerise(e.g.,2 price rise (e.g., 2pricerise(e.g.,10 to $12: 120 to 160).
  • Extrapolate to 18:+18: +18:+6 from $12 implies +120 units (3 intervals × 40), so supply = 280 units.
  • Note: table ends at 16(240units);nodirectdatafor16 (240 units); no direct data for 16(240units);nodirectdatafor18, and 120-unit extension doesn't match any choice.

Why C is correct:

  • Not applicable; no option fully aligns with law of supply (price ↑ → quantity supplied ↑ along curve).

Why the others are wrong:

  • A: "Contract" implies decrease, but price ↑ causes extension (increase); movement up is right but quantity wrong.
  • B: "Contract by 200" and inward shift contradict price ↑ effect; shifts require non-price factors.
  • D: "Extend by 200" overstates extrapolated increase (actual +120); outward shift incorrect for price-only change.

Not enough information to select a matching option. Final answer: Not enough information.

Topic: Supply

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