An airline operating domestic flights observes that when a rival high-speed rail operator reduces its fares, the demand for flights falls significantly. Which one of the following is the primary determinant of this high cross elasticity of demand (XEDXEDXED)?
The high degree of substitutability between domestic flights and high-speed rail travel
The high proportion of consumer income spent on intercity transport tickets
A reduction in the operating costs of the high-speed rail network
The short-run fixed capacity of aircraft and airport takeoff slots
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.