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1.3 Price determination in a competitive market

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Question 10

The income elasticity of demand for a product is -2.5. Which one of the following statements is correct?

A

A 10%10\%10% increase in income leads to a 25%25\%25% fall in quantity demanded.

B

A 10%10\%10% increase in price leads to a 25%25\%25% fall in quantity demanded.

C

The product is a luxury, normal good.

D

Demand for the product is income inelastic.

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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