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

Income elasticity of demand — practice question

Good X has a substitute, good Y, and a complement, good Z. The price of good Y falls, whereas the price of good Z rises. Why could the equilibrium price of good X stay unchanged?

  • AProducers of good X adopt new technology.
  • BProducers of good X receive a subsidy.
  • CSome firms stop production of good X.
  • DThe tax on the production of good X is cut.

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