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

Income elasticity of demand — practice question

The diagram illustrates the demand for and supply of a normal good. E1 is the original equilibrium point. Which changes might lead to a new equilibrium E2?

  • Aa decrease in both the demand for and the supply of the good
  • Ban increase in both the demand for and the supply of the good
  • Can increase in consumer incomes, and a decrease in the supply of the good
  • Dan increase in the price of a complement to the good, and an increase in the supply of the good

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