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1.3 Price determination in a competitive market

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Question 65

All other things being equal, when the average price of hybrid SUVs rises from £30,000 £30,000\,£30,000 to £36,000£36,000£36,000, the monthly quantity demanded of all-electric sedans increases from 15,000 15,000\,15,000 units to 18,750 18,750\,18,750 units. Therefore, the cross elasticity of demand (XEDXEDXED) for all-electric sedans with respect to the price of hybrid SUVs is

A

−0.80-0.80−0.80

B

+0.80+0.80+0.80

C

−1.25-1.25−1.25

D

+1.25+1.25+1.25

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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