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

Income elasticity of demand — practice question

The diagram illustrates the demand curve, DD1, and the supply curve, SS1, for eye operations. These operations are supplied free of charge to the consumer. Which statement is correct?

  • AConsumer surplus from the operations is ODD1.
  • BThe equilibrium price is P.
  • CThe equilibrium price is indeterminate, because the supply curve is vertical.
  • DThe equilibrium price is zero.

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