An increase in average household incomes leads to an increase in the demand for premium organic vegetables and a decrease in the demand for canned vegetables. It can therefore be concluded that
canned vegetables are an inferior good while premium organic vegetables are a normal good.
the demand for premium organic vegetables is income elastic while the demand for canned vegetables is income inelastic.
there is a negative cross-price elasticity of demand between premium organic vegetables and canned vegetables.
premium organic vegetables have a high price elasticity of demand while canned vegetables have a low price elasticity of demand.
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.