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

Income elasticity of demand — practice question

A manufacturer cuts the price of its goods after creating a more efficient manufacturing process. It produces leather belts that compete with belts made from artificial material. What outcomes are likely to result from the change in the manufacturing process?

  • Asupply of leather belts decreases; price of artificial belts decreases
  • Bsupply of leather belts decreases; price of artificial belts increases
  • Csupply of leather belts increases; price of artificial belts decreases
  • Dsupply of leather belts increases; price of artificial belts increases

Worked solution & mark scheme

This 1-mark question has a full step-by-step worked solution and mark scheme.

  • Full mark scheme, point by point
  • Step-by-step worked solution
  • Write your answer & get it marked instantly by AI