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

Income elasticity of demand — practice question

Pressure to cut the use of fossil fuels has caused oil companies to lower the amount they invest in looking for new reserves. What will be the long-run effect of such a policy on the market for oil?

  • Amarket change: upward movement along the demand curve; price change: price decreases
  • Bmarket change: downward movement along the demand curve; price change: price increases
  • Cmarket change: supply shifts to the left; price change: price increases
  • Dmarket change: supply shifts to the left; price change: price decreases

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