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

Income elasticity of demand — practice question

For price to function as a rationing mechanism for a final product, an increase in price has to

  • Aattract new firms into the market.
  • Bgenerate additional profits for producers.
  • Creduce the quantity demanded by some individuals.
  • Dsignal the need for redeployment of labour.

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