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

Cross elasticity of demand — practice question

The diagram represents the European airline market. The initial demand curve is D1 and the initial supply curve is S1. Demand for air travel then rises. Which regions indicate consumer surplus and producer surplus at the new equilibrium?

  • Aconsumer surplus FMH; producer surplus HMJ
  • Bconsumer surplus FMH; producer surplus JMTO
  • Cconsumer surplus GNK; producer surplus KNJ
  • Dconsumer surplus GNK; producer surplus KNRO

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