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

Price elasticity of demand — practice question

The price of a good increases by 5% and the quantity demanded of it increases by 3%. At the same time, consumer incomes for the good rise by 4%. In this situation, the law of demand seems not to apply. What is the most likely explanation?

  • AOther things did not remain equal.
  • BThe demand for the good was price inelastic.
  • CThe real price of the good fell.
  • DThe time period was the very short run.

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