Economics 9708 · AS & A Level · Cross elasticity of demand

Cross elasticity of demand — practice question

Following the movement of the supply curve from S to S1 in the rice market, what does the area JKLM show?

  • Athe additional saving to importers of the removal of a tariff on rice
  • Bthe cost to the government of a subsidy to rice growers
  • Cthe increase in consumer surplus from the introduction of a maximum price for rice
  • Dthe loss in government revenue from the reduction in a lump sum tax on rice

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