In a recent industry report, transport economists stated that public bus travel in urban metropolitan areas behaves as a typical inferior good in the consumer market.
Draw a supply and demand diagram showing the effects of a significant rise in real household disposable incomes on the equilibrium price and quantity of public bus travel.
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.