Price determination
What Price determination means in Economics A-Level, as defined for AQA.
Definitions of Price determination
Exam boards and our study guides word this term in slightly different ways. Learn the version your board uses.
Check what you remember
Read the wording for your board, then hide it and explain Price determination in your own words. Rough notes are fine. This is a self-check, with no mark or grade.
Reference: AQA
The industry diagram shows market supply and demand determining the ruling price, which the firm takes as a perfectly elastic demand curve.
Found by reading vertically up from the profit-maximising output to the average revenue curve.
Topics that use Price determination
- Monopoly and monopoly power (AQA A-Level)
- Perfect competition (AQA A-Level)
Related terms
- Allocative efficiency
- Allocative inefficiency
- Average revenue
- Barriers to entry
- Dynamic adjustment
- Dynamic efficiency
- Economic efficiency
- Economies of scale
Using Price determination in the exam
Check the command word and mark scheme for your exact question. After comparing your explanation with the reference, use the term in an answer on the linked topic. This practice does not predict an exam mark.
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