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

Income elasticity of demand — practice question

The diagram illustrates the market for a normal good. What would most likely make both the demand and supply curves move to the right?

  • Aa fall in the price of the good and a fall in the rate of indirect tax on the good
  • Ba rise in the price of a complementary good and an increase in the number of firms in the industry
  • Ca rise in the price of a substitute good and a fall in the price of a raw material used in the production of the good
  • Dan improvement in production techniques and a fall in the incomes of consumers

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