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

Income elasticity of demand — practice question

In a free market that is out of equilibrium because there is a shortage of a product, what happens to the price, the quantity demanded and the quantity supplied as the market adjusts towards equilibrium?

  • Aprice decrease; quantity demanded decrease; quantity supplied increase
  • Bprice decrease; quantity demanded increase; quantity supplied decrease
  • Cprice increase; quantity demanded decrease; quantity supplied increase
  • Dprice increase; quantity demanded increase; quantity supplied decrease

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