Text A, Paragraph 1
A coffee producer in Ethiopia increased the quantity of coffee supplied following a price increase in global markets, demonstrating the concept of price elasticity of supply.
Define the term price elasticity of supply as indicated in bold in (Text A, Paragraph 1).
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Text B, Paragraph 2
In Colombia, the price of bananas increased from $0.30 to $0.45 per unit, causing the quantity supplied to rise from 500 to 600 units.
Calculate the price elasticity of supply (PES) for bananas using the data provided in (Text B, Paragraph 2).
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Text E, Paragraph 2
A mining company in South Africa cannot easily increase production when metal prices rise due to the high cost and complexity of expanding operations, demonstrating price inelastic supply.
State two reasons why the mining industry might have price inelastic supply as indicated in bold (Text E, Paragraph 2).
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Text A, Paragraph 2
In the wind turbine manufacturing industry in China, the supply of turbines is highly elastic due to the mobility of factors of production.
Outline how the mobility of factors of production can lead to elastic supply, as indicated in bold (Text A, Paragraph 2).
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Text B, Paragraph 1
A furniture manufacturer in Sweden has been able to adjust production quickly in response to rising prices, illustrating elastic supply.
Draw a diagram showing elastic supply, as indicated in bold (Text B, Paragraph 1).
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Text D, Paragraph 4
In the gold mining industry in Australia, the long time required to expand operations means that supply is inelastic even when gold prices rise sharply.
Outline how time period influences the price elasticity of supply, as demonstrated in the gold mining industry (Text D, Paragraph 4).
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Text A, Paragraph 3
To meet a sudden rise in coffee demand, Columbia's coffee farmers have attempted to increase production. However, they struggle to respond quickly. Government economists are studying the supply responsiveness of coffee to understand how production constraints affect the price elasticity of supply.
Using a demand and supply diagram, explain why the supply of coffee might be less responsive to a price increase in Columbia.
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Text B, Paragraph 2
A surge in global demand for eco-friendly footwear has led to significant price increases in Italy's shoe market. One local shoe manufacturer quickly adjusted its output to produce more footwear. Analysts predict that this flexibility will allow the company to capture market share more rapidly than competitors with more rigid production methods.
Using a PES diagram, explain how flexibility in production might impact the price elasticity of supply for shoes in Italy.
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Text C, Paragraph 1
Advancements in agricultural technology have transformed Kenya’s farming industry. Innovations such as automated irrigation, pest control systems, and high-yield seeds mean crop production can now be adjusted to meet fluctuating demand, which government officials believe will help stabilise food prices in the long term.
Using a demand and supply diagram, explain how technological advancements might affect the price elasticity of supply in Kenya’s agricultural sector.
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