1. Starter Get out your cheat sheet for supply and demand. Did you include: Supply and demand graphs? Reasons why supply shifts? Key points on both graphs. Reasons why demand shifts?

2. Homework – Due Thursday 14th Work out the PED for each, and comment on your result. The price of DVDs today is £200, and the quantity demanded is 4m. Next year the price falls to £180 and the quantity demanded rises to 6m. The price of Pens today is £1, and the quantity demanded is 1m. Next year the price rises to £1.10 and the quantity demanded falls to 950,000. The price of The Times today is 40p, and the quantity demanded is 2m. Next year the price falls to 30p and the quantity demanded rises to 2.2m

3. Question 1 Calculate the % change in price Price new – Price old Price old x 100 180-200/200 x100 = -10% Then % change in Q / % change in P 50/-10= -5 >1 means that the demand is elastic, Calculate the % change in quantity (Q): New Q – Old Q Old Q x 100 6-4/4 x100 = 50%

4. Question 2 Calculate the % change in price Price new – Price old Price old x 100 1.10-1/1 x100 = 10% Then % change in Q / % change in P -5/10= -0.5 <1 means that the demand is inelastic, Calculate the % change in quantity (Q): New Q – Old Q Old Q x 100 950,000- 1,000,000/1000000 x100 = -5%

5. Question 3 Calculate the % change in price Price new – Price old Price old x 100 30-40/40 x100 = -25% Then % change in Q / % change in P 10/-25= -0.4 <1 means that the demand is inelastic, Calculate the % change in quantity (Q): New Q – Old Q Old Q x 100 2.2-2/2 x100 = 10%

6. Sample question 1 Case study on next slide 1 mark for stating the formula 3 marks for making the calculation

8. Answer question 1 Knowledge 1 mark for stating the formula Calculation 3 marks: Step 1 – what do we know? – We know from the question that the PED value is (-0.8) – We know from the case study that the original price was £20 – We know from the question that the price has risen by £3

9. Step 2 Find the % change in price: Price new – Price old Price old x 100 23-20 20 X 100 3 20 x 100 15%

10. Step 3: Calculate % change in quantity demanded (-0.8) x 15% (-12)% The final answer is: (-12)%

11. Activity Draw and label a supply and demand curve.

12. Adjust your supply and demand curve

13. UK Car Market Demand and SupplyScenarios An increase in the population of car buyers aged 20-70 1 Price Quantity D1 S1 P1 Q1Q2

14. DemandRight An increase in the population of car buyers aged 20-70 Price Quantity D1 S1 P1 Q1 D2 P2 Q2 UK Car Market

15. Demand and SupplyScenarios A reduction in subsidies given by the government to car firms 2 Price Quantity D1 S1 P1 Q1Q2 UK Car Market

16. SupplyLeft A reduction in subsidies given by the government to car firms Price Quantity D1 S1 P1 Q1 P2 Q2 S2 UK Car Market

17. Demand and SupplyScenarios Increased road tax on cars 3 Price Quantity D1 S1 P1 Q1Q2 UK Car Market

18. DemandLeft Increased road tax on cars Price Quantity D1 S1 P1 Q1 D2 P2 Q2 UK Car Market

19. Demand and SupplyScenarios Increasing regulation requires all cars to be registered on a national database by manufacturers and assessed for a new quality certificate before being sold 4 Price Quantity D1 S1 P1 Q1Q2 UK Car Market

20. SupplyLeft Increasing regulation requires all cars to be registered on a national database by manufacturers and assessed for a new quality certificate before being sold Price Quantity D1 S1 P1 Q1 P2 Q2 S2 UK Car Market

21. Demand and SupplyScenarios Improvement in high speed rail services and tram networks 5 Price Quantity D1 S1 P1 Q1Q2 UK Car Market

22. DemandLeft Improvement in high speed rail services and tram networks Price Quantity D1 S1 P1 Q1 D2 P2 Q2 UK Car Market

23. Demand and SupplyScenarios Increased petrol prices 6 Price Quantity D1 S1 P1 Q1Q2 UK Car Market

24. DemandLeft Increased petrol prices Price Quantity D1 S1 P1 Q1 D2 P2 Q2 UK Car Market

25. Demand and SupplyScenarios New law allows drivers to continue driving until 85 years old using existing licence (currently 70) 7 Price Quantity D1 S1 P1 Q1Q2 UK Car Market

26. DemandRight New law allows drivers to continue driving until 85 years old using existing licence (currently 70) Price Quantity D1 S1 P1 Q1 D2 P2 Q2 UK Car Market

27. Demand and SupplyScenarios New technology allows Lithium ion batteries for electric cars to be developed at half the existing cost 8 Price Quantity D1 S1 P1 Q1Q2 UK Car Market

28. SupplyRight New technology allows Lithium ion batteries for electric cars to be developed at half the existing cost Price Quantity D1 S1 P1 Q1 P2 Q2 S2 UK Car Market

29. Demand and SupplyScenarios UK car firms increase advertising by 140% 9 Price Quantity D1 S1 P1 Q1Q2 UK Car Market

30. DemandRight UK car firms increase advertising by 140% Price Quantity D1 S1 P1 Q1 D2 P2 Q2 UK Car Market

31. Demand and SupplyScenarios Rise in average wages for car manufacturers 10 Price Quantity D1 S1 P1 Q1Q2 UK Car Market

32. SupplyLeft Rise in average wages for car manufacturers Price Quantity D1 S1 P1 Q1 P2 Q2 S2 UK Car Market

33. Demand and SupplyScenarios Consumer fitness trends favour using bikes to get to work 11 Price Quantity D1 S1 P1 Q1Q2 UK Car Market

34. DemandLeft Consumer fitness trends favour using bikes to get to work Price Quantity D1 S1 P1 Q1 D2 P2 Q2 UK Car Market

35. Demand and SupplyScenarios Lower disposable incomes in UK due to higher mortgage costs 12 Price Quantity D1 S1 P1 Q1Q2 UK Car Market

36. DemandLeft Lower disposable incomes in UK due to higher mortgage costs Price Quantity D1 S1 P1 Q1 D2 P2 Q2 UK Car Market

37. Demand and SupplyScenarios Lower interest rates affect businesses and consumers 13 Price Quantity D1 S1 P1 Q1Q2 UK Car Market

38. Demand Right & SupplyRight Lower interest rates affect businesses and consumers Price Quantity D1 S1 P1 Q1 D2 P2 Q2 UK Car Market S2

39. Demand and SupplyScenarios Fall in cost of steel imported to UK 14 Price Quantity D1 S1 P1 Q1Q2 UK Car Market

40. SupplyRight Fall in cost of steel imported to UK Price Quantity D1 S1 P1 Q1 P2 Q2 S2 UK Car Market

41. Demand and SupplyScenarios New law states UK drivers must be aged 19 or over 12 Price Quantity D1 S1 P1 Q1Q2 UK Car Market

42. DemandLeft New law states UK drivers must be aged 19 or over Price Quantity D1 S1 P1 Q1 D2 P2 Q2 UK Car Market

43. (c) Using the data from Extract A, construct a supply and demand diagram to illustrate the impact of YOTEL’s decision on the Singapore hotel market.

46. Activity Complete data response 2, page 49.

47. Homework – Due Tuesday 19 th January Complete data response 2, page 49. Make a cheat sheet for: – Market Research – Market positioning – 8 mark questions – 10 mark questions