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1.3 Price determination in a competitive market

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Question 32

The cross-price elasticity of demand for organic vegetables with respect to the price of non-organic vegetables is +1.2. This means that:

A

organic vegetables and non-organic vegetables are complementary goods.

B

a 10%10\%10% increase in the price of non-organic vegetables will lead to a 12%12\%12% increase in the quantity demanded of organic vegetables.

C

a 12%12\%12% increase in the price of non-organic vegetables will lead to a 10%10\%10% increase in the quantity demanded of organic vegetables.

D

organic vegetables are classified as luxury goods because the elasticity coefficient is greater than 111.

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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