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1.2 How markets work

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Question 33

The income elasticity of demand for budget brand white bread is estimated to be -0.8.

This implies that:

a 10% increase in its price will lead to an 8% decrease in demand

as household incomes fall, consumers will buy less budget brand white bread

budget brand white bread has a negative cross elasticity of demand compared to branded bread

budget brand white bread is an inferior good

1.2 How markets work Questions

  1. A Level
  2. /Economics
  3. /1.2 How markets work