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

Price elasticity of demand — practice question

A market investigation of good X showed that it is an inferior good and a near substitute for good Y. Which figures for the income elasticity of demand for good X and its cross elasticity of demand in relation to the price of good Y would fit this?

  • Aincome elasticity of demand for good X: –1.2; cross elasticity: –0.9
  • Bincome elasticity of demand for good X: –1.2; cross elasticity: +0.9
  • Cincome elasticity of demand for good X: +1.2; cross elasticity: –0.9
  • Dincome elasticity of demand for good X: +1.2; cross elasticity: +0.9

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