Question 19M.3.HL.TZ0.1f
| Date | May 2019 | Marks available | [Maximum mark: 2] | Reference code | 19M.3.HL.TZ0.1f |
| Level | HL | Paper | 3 | Time zone | TZ0 |
| Command term | Define | Question number | f | 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.
An increase in costs of production has resulted in a new supply function:
Qs1 = − 60 + 3P
Define the term price elasticity of supply.
[2]
The time taken to produce goods is an important determinant of the price elasticity of supply.
Generally well-answered, although lower achieving responses merely stated or described the formula, while some referred to the responsiveness of producers, without referring to supply or quantity supplied.
