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1.3 Price determination in a competitive market

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Question 72

An economic analysis of the market for a consumer good, Product XXX, reveals the following responses to changing economic conditions:

  • When consumer incomes rise by 8%, the quantity demanded of Product X X\,X falls by 6%.
  • When the price of a related good, Product YYY, rises by 12%, the quantity demanded of Product X X\,X increases by 9%.

Which of the following correctly classifies Product X X\,X and describes its relationship to Product YYY?

A

Product XXX is a normal good, and is a substitute for Product YYY.

B

Product XXX is an inferior good, and is a substitute for Product YYY.

C

Product XXX is an inferior good, and is a complement to Product YYY.

D

Product XXX is a normal good, and is a complement to Product YYY.

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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