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

Income elasticity of demand — practice question

A power station burns waste in order to generate electricity. As a by-product, this also creates fertiliser for farmers. What is the effect in the fertiliser market of an increase in demand for electricity?

  • AThe price of fertiliser falls and the quantity demanded rises.
  • BThe price of fertiliser falls and the quantity supplied falls.
  • CThe price of fertiliser rises and the quantity demanded falls.
  • DThe price of fertiliser rises and the quantity supplied rises.

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