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

Income elasticity of demand — practice question

The diagram illustrates the effect on equilibrium of a rise in the costs of production. The initial price is $72. The price elasticity of demand is –2.0. What is the revised equilibrium price, P2?

A$81.00
B$84.00
C$92.00
D$108.00

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