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

Income elasticity of demand — practice question

In the diagram, D shows the demand curve for an agricultural commodity and S1 is the original supply curve. A good harvest shifts the supply curve to S2. How far must the demand curve move to keep farm incomes unchanged?

  • A500 tonnes at all prices
  • B1000 tonnes at all prices
  • C2000 tonnes at all prices
  • D4000 tonnes at all prices

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