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

Price elasticity of demand — practice question

(a)[8]

Explain what is meant by income elasticity of demand and, with the help of examples, show how it can be used to decide whether a good is normal or inferior.

(b)[12]

Discuss whether knowledge of price elasticity of demand or price elasticity of supply is more useful to a car manufacturer.

Worked solution & mark scheme

This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Explanation of income elasticity of demand: what it shows” …

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