Assess the likely impact of the rise in price of natural rubber for consumers of

natural rubber such as car manufacturers.Answer following the mark scheme

10 {c} Assess the likely impact of the rise in price of natural rubber for consumers of natural rubber such as car manufacturers. Answer Consumers (car manufacturers) are likely to face increased production costs (1 mark) and may try and pass these on to their customers eg car dealers, private buyers or fleet car buyers (1 mark}. Tyre manufacturers may experience falling profits 1' therefore attempt to increase efficiency 1' cut output and employment I seek substitutes I' consider recycling tyres. {2+2 marks). Evaluation (2+2 marks for two or more points) )9 Impact depends on percentage of total costs which natural rubber comprises. b Impact depends on price elasticity of demand for cars - if inelastic; the car manufacturers could pass on increased costs to their own customers. Impact depends on ability to find long term substitutes for natural rubber or the ability to recycle it. Impact depends upon existing stocks of natural rubber held by tyre manufacturers