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1.2.3 Price, income and cross elasticities of demand

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Question 20

Market for Residential Green Energy Technologies

Using the data below, which one of the following is most likely?

Price elasticity of demand for residential solar panels-0.75
Cross price elasticity of demand for residential battery storage units in response to a price change in residential solar panels-1.25
A

A decrease in the price of residential solar panels will increase revenue; residential solar panels and residential battery storage units are complements

B

A decrease in the price of residential solar panels will decrease revenue; residential solar panels and residential battery storage units are substitutes

C

A decrease in the price of residential solar panels will decrease revenue; residential solar panels and residential battery storage units are complements

D

A decrease in the price of residential solar panels will increase revenue; residential solar panels and residential battery storage units are substitutes

Markscheme

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

119 exam-style questions on Edexcel A A Level Economics 1.2.3 Price, income and cross elasticities of demand. Each one has a worked solution and a mark scheme showing where the marks go.

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