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

Income elasticity of demand — practice question

On the diagram, D represents the demand curve for an agricultural commodity, while S1 shows the original supply curve. A good harvest shifts the supply curve to S2. By what amount must the demand curve shift so that farm incomes remain unchanged?

  • A500 tonnes
  • B1000 tonnes
  • C2000 tonnes
  • D4000 tonnes

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