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

Income elasticity of demand — practice question

A car rental company hires out the cars in its fleet on weekdays to business users and at weekends to tourists. What is likely to happen if demand from tourists for car rentals increases?

  • Aprice of weekend rentals decrease, size of car fleet unchanged, price of weekday rentals decrease
  • Bprice of weekend rentals decrease, size of car fleet unchanged, price of weekday rentals unchanged
  • Cprice of weekend rentals increase, size of car fleet increase, price of weekday rentals decrease
  • Dprice of weekend rentals increase, size of car fleet increase, price of weekday rentals unchanged

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