Economics 9708 · AS & A Level · Price elasticity of demand
Explain, using the concept of income elasticity of demand, how a fall in incomes influences demand for inferior goods and necessary goods.
Discuss the policies that businesses might adopt to keep sales up when incomes are falling and assess which one is most likely to succeed.
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Knowledge and understanding of income elasticity of demand (up to 4 marks): definition (1 mark), accurate formula (up to 2 marks), some elaboration (1 mark).” …