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

Income elasticity of demand — practice question

Toyota Motor Corporation produces cars to match customer orders, instead of trying to market vehicles it has already assembled. If the company experienced a sharp rise in orders for its Prius model, what would be expected to happen to its existing supply curve on a demand and supply diagram?

  • AIt will be unchanged.
  • BIt will become flatter.
  • CIt will shift to the left.
  • DIt will shift to the right.

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