A manufacturer of hybrid-electric aviation engines invents and sells a new engine type. The new engines reduce aviation fuel consumption by 30% on aircraft fitted with them.
Which one of the following is most likely to be correct? The
supply of aviation fuel will fall because aviation fuel is in joint supply with engines.
demand for crude oil to refine into aviation fuel will fall because the demand for crude oil is derived from the demand for aviation fuel.
demand for aircraft engines will rise because engines and aviation fuel are in composite demand.
demand for conventional passenger jet engines will fall because they are in joint demand with the new hybrid engines.
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.