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

Income elasticity of demand — practice question

In the diagram, S1S1 and DD show the initial supply and demand curves for an agricultural product. Bad weather then cuts supply to S2S2. The government prevents the price from rising above OP1. If the price is kept at OP1, how much of the product must the government release from stocks?

  • AOQ3
  • BQ1Q3
  • CQ1Q2
  • DQ2Q3

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