Question 19M.3.HL.TZ0.1b
| Date | May 2019 | Marks available | [Maximum mark: 2] | Reference code | 19M.3.HL.TZ0.1b |
| Level | HL | Paper | 3 | Time zone | TZ0 |
| Command term | Outline | Question number | b | Adapted from | N/A |
Note that widgets are an imaginary product.
In Country X, the supply and demand for widgets are given by the functions
Qs = − 45 + 4.5P
Qd = 180 − 3P
where P is the price per widget in dollars ($), Qs is the quantity of widgets supplied (thousands per year) and Qd is the quantity of widgets demanded (thousands per year).
The supply (S) and demand (D) functions are represented in Figure 1.
Outline the reason why the quantity supplied increases as the price rises.
[2]
NB Responses which outline only that producers are “more able to afford” to produce more should not be rewarded.
Many students simply stated the Law of Supply, or justified with reference to revenue rather than profit. In perfect competition revenue would increase with an increase in output whether price increased or not, so reference to revenue only was deemed a Level 1 response.
