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

Income elasticity of demand — practice question

The diagram illustrates the demand and supply curves for parking spaces in a hospital car park. The managers choose to depend on the price mechanism to distribute parking spaces at the hospital. What is needed for this to work?

  • AAlternative means of transport must be provided for those unable to afford price OP.
  • BA survey will be needed to find out the amount users are willing to pay.
  • CThe capacity of the car park will need to be expanded.
  • DThe price charged for parking spaces must be OP.

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