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Specification: 

  • Inflation, price elasticity of supply, price determination and mechanism, consumers’ behaviour

Click to read the article below and then answer the questions:

Inflation tests pricing power of global brands

  • Define inflation

  • “Generally, the experience when rapid price inflation hits the consumer goods industry is that there is some compression in margins for a year or so, and then most gets passed through to the consumer,” Hayllar said. Explain how product elasticities influence producers’ decisions to pass margin compression on to their customers

  • Explain with a D-S diagram the cost of production increases of some goods driven by migrant labour shortages

  • Discuss the effectiveness of “shrinkflation” strategies. Based on subject knowledge and your personal experience, include alternative views of consumers’ behaviour

Gian Luca Scappini, Stepney Green Maths, Computing and Science College

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