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

Income elasticity of demand — practice question

The diagram illustrates the demand and supply curves for solar energy in India. The starting equilibrium is at X. The Indian government raises the subsidy for solar energy producers. At the same time, the price of alternative energy sources increases. Which point shows the new equilibrium position?

  • AD
  • BC
  • CB
  • DA

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