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1.3 Price determination in a competitive market

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Question 87

An apparel retailer has estimated values of the income elasticity of demand for some of its product categories as shown in the table below.

Product CategoryIncome elasticity of demand
Designer Coats0.40
Leather Boots0.25
Wool Sweaters0.15
Cotton Socks0.05

If consumer incomes increase by 4%, for which of these product categories will the quantity demanded increase by more than 1%?

A

Cotton Socks

B

Designer Coats

C

Designer Coats and Leather Boots

D

Wool Sweaters and Cotton Socks

Markscheme

1.3 Price determination in a competitive market Questions

  1. A Level
  2. /Economics
  3. /1.3 Price determination in a competitive market

256 exam-style questions on AQA A Level Economics 1.3 Price determination in a competitive market, covering 1.3.1 The determinants of the demand for goods and services, 1.3.2 Price, income and cross elasticities of demand, 1.3.3 The determinants of the supply of goods and services, 1.3.4 Price elasticity of supply, 1.3.5 The determination of equilibrium market prices, and 1.3.6 The interrelationship between markets. Each one has a worked solution and a mark scheme showing where the marks go.

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