Skip to content
MathsGenie logo
Quick links
Open app

Course home

  1. A Level
  3. Economics Edexcel A
  5. Question bank

1.2.3 Price, income and cross elasticities of demand

EasyMediumHard
1234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950515253
Question 6

The cross elasticity of demand (XED) for electric vehicles with respect to the price of residential electricity is estimated to be -1.5.

This implies that:

electric vehicles and residential electricity are substitute goods

a 10%10\%10% increase in the price of residential electricity will lead to a 15%15\%15% decrease in the demand for electric vehicles

electric vehicles are an inferior good because the coefficient is negative

a 15%15\%15% increase in consumer incomes will lead to a 10%10\%10% decrease in the demand for electric vehicles

1.2.3 Price, income and cross elasticities of demand Questions

  1. A Level
  2. /Economics
  3. /1.2.3 Price, income and cross elasticities of demand