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1.2.3 Price, income and cross elasticities of demand

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Question 21

Market for E-Readers and E-Books

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

Elasticity measureValue
Price elasticity of demand for e-readers-0.65
Cross price elasticity of demand for e-books in response to a price change in e-readers-0.78

A decrease in the price of e-readers will decrease total revenue; e-readers and e-books are complements.

A decrease in the price of e-readers will decrease total revenue; e-readers and e-books are substitutes.

A decrease in the price of e-readers will increase total revenue; e-readers and e-books are complements.

A decrease in the price of e-readers will increase total revenue; e-readers and e-books are substitutes.

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