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

Income elasticity of demand — practice question

Butter is a normal good. It is jointly demanded with bread and jointly supplied with buttermilk. Demand for butter rises because consumer incomes have increased. What effects will this rise have on the prices of bread and buttermilk?

  • Aprice of bread decreases; price of buttermilk decreases
  • Bprice of bread decreases; price of buttermilk increases
  • Cprice of bread increases; price of buttermilk decreases
  • Dprice of bread increases; price of buttermilk increases

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