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

Income elasticity of demand — practice question

The diagram illustrates the effect of a landowner who previously let motorists park in his field free of charge, but then sets a parking fee of $1. What is the result of this change?

  • AThe landowner gains a surplus of Y + Z.
  • BThe motorist gains a surplus of X + Y.
  • CThe ownership of surplus Y changes.
  • DThere is a total surplus of X + Y + Z.

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