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

Income elasticity of demand — practice question

The diagram depicts a market for a good that is met partly by domestic production and partly by imports. Sh1 represents domestic supply, while Sw represents world supply. Domestic supply then moves to Sh2. What would the consumption level be, and what is the corresponding import volume after the supply change?

  • Aconsumption OU, volume of imports TU
  • Bconsumption OU, volume of imports UV
  • Cconsumption OV, volume of imports TV
  • Dconsumption OV, volume of imports UV

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