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1.3 Price determination in a competitive market

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Question 15

At the initial market equilibrium, the income elasticity of demand for public bus transport is -0.4, and the price elasticity of supply is +1.2. Then, there is a 5% increase in consumers' average real income.

Which one of the following combinations, A, B, C or D, is most likely to show the changes in the market equilibrium price and quantity?

Price: Higher | Quantity: Lower

Price: Higher | Quantity: Higher

Price: Lower | Quantity: Lower

Price: Lower | Quantity: Higher

1.3 Price determination in a competitive market Questions

  1. A Level
  2. /Economics
  3. /1.3 Price determination in a competitive market