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

Income elasticity of demand — practice question

In 2011 and then again in 2015, the prices of gold, silver and copper declined sharply. The 2011 price drop was attributed to miners raising output. The 2015 price drop happened because demand, particularly from China, weakened. If equilibrium before 2011 was shown as X, how should these changes in 2011 and later in 2015 be represented on the demand and supply diagram?

  • AX Q R
  • BX R Q
  • CX S R
  • DX T S

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