Skip to content

Course home

Sign up

1.3 Price determination in a competitive market

EasyMediumHard
123456789101112131415161718192021222324252627282930313233343536373839404142434445464748495051525354555657585960616263646566676869707172737475767778798081828384858687888990919293949596979899100101102103104105106107108109110111112113114115116117118119120121122123124125126127128129130131132133134135136137138139140141142143144145146
Question 116

A consumer's monthly disposable income increases from £2,500 \pounds 2,500\,£2,500 to £2,650\pounds 2,650£2,650. All other things being equal, if the consumer's income elasticity of demand for Product X is -0.5 and their income elasticity of demand for Product Y is 1.5, which one of the following statements is correct?

A

Spending on Product X will fall by £4.50\pounds 4.50£4.50 and spending on Product Y will increase by £13.50\pounds 13.50£13.50

B

Spending on Product X will fall by £45\pounds 45£45 and spending on Product Y will increase by £135\pounds 135£135

C

Spending on Product X will fall by 30%30\%30% and spending on Product Y will increase by 90%90\%90%

D

Spending on Product X will fall by 3%3\%3% and spending on Product Y will increase by 9%9\%9%

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.

Question bank