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1.3 Price determination in a competitive market

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Question 18

The table below shows estimated values of income elasticities of demand for four different consumer goods, P, Q, R and S.

GoodEstimate of income elasticity of demand
P+0.45
Q+1.25
R-0.35
S-0.80

From the table, it may be concluded that

A

the price elasticity of demand for all four goods is inelastic.

B

the cross-price elasticity of demand between Good P and Good Q is negative.

C

as incomes rise, the demand for Good R and Good S will rise.

D

as incomes rise, only the demand for Good P and Good Q will rise.

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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